Everything to Know About a Holdover Tenant

As a landlord, you should know that the best way to earn a stable passive income from their rentals is by attracting long-term tenants. When a renter stays for a long time, you can ensure that your rental business will remain profitable for the long term.

Not renewing your tenants' lease while allowing them to stay on your rental may have some serious consequences. In addition to property damage, you run the risk of dealing with holdover tenancies.

In this article, the experts at TE Johnson & Sons will go over what holdover tenancies are and the potential dangers they present to landlords. Keep reading to discover our effective strategies for dealing with holdover tenants and proactive measures to avoid such situations altogether.

What Is a Holdover Tenant?

A holdover tenant is a renter who continues to live in a rental property after their lease agreement has expired. In most cases, this occurs when the tenant remains on the premises without entering into a new lease.

As a landlord, if you accept rent payments from a holdover tenant, they are legally allowed to continue occupying your property. To end a holdover tenancy, you must stop accepting rent payments and inform tenants that they’re no longer allowed to stay in your property. If they don’t move out, you’ll have to formally begin an eviction process.


The Dangers of Holdover Tenants


Given that there’s no lease agreement, holdover tenancies come with a lot of uncertainty. Without a lease, tenants won’t know what terms or conditions they should stick to. This lack of clarity can lead to potential legal disputes or even property damage.

Late or Missed Rent Payments

A solid lease agreement should clearly state the price of rent, the due date and your late fee policies. However, with holdover tenancies, these terms cannot be enforced since there’s no actual rental agreement in place.

In most cases, this can lead to late or missed rental payments, leaving you in a financial bind. If the issue escalates, you’ll have to deal with evictions and other legal disputes.

Property Damage

Typically, a rental agreement should state the tenant’s responsibilities regarding property maintenance. If a renter neglects or damages your property beyond normal wear and tear, you can reference the lease to point out the fees they could face such as you making deductions from their security deposit.

However, in holdover tenancies, this is impossible because the lease agreement is no longer valid. This can lead to neglect, damage and even unauthorized alterations to the premises, which can cost you a lot of money in repairs and renovations.

Lengthy Legal Disputes

Dealing with a holdover tenant can be challenging. Failing to address the situation promptly can lead to the establishment of an unwarranted tenancy, making it extremely difficult for you to regain control of your property.


The best course of action is to evict the tenant following the proper legal procedures. However, renters could create some potential challenges for you such as delaying the process. That’s why hiring a lawyer is highly advised in these cases.

How to Deal with Holdover Tenants

Dealing with holdover tenants can be extremely complicated. However, you can stop things from escalating to an eviction by doing the following things:

Keeping Open Lines of Communication

Communication is the key when dealing with holdover tenancies. You should initiate an open and transparent discussion with the renters with expired leases. This can help you understand the reasons behind the holdover and find a solution that benefits both the parties.

Drafting a Temporary Agreement

By talking with your tenants, you can come to an agreement to let them stay as long as they sign a temporary agreement. While this document is not the same as a lease, it can help you outline the terms of the occupancy, including the price of rent, tenant responsibilities and the terms of the arrangement.

Negotiating a New Lease

The ideal way to deal with a holdover tenant would be to simply negotiate and draft a new lease agreement. This way, you can ensure that the terms and conditions of the lease are clearly defined, reducing ambiguity and potential conflicts down the line.


Some holdover tenants might not want to sign a yearly lease. In this case, you can opt for a month-to-month lease agreement instead. The agreement would automatically renew every month and can end at any time. While short-term leases may come with uncertainty, you’ll have the peace of mind of knowing that your investment is protected.

Taking Legal Action

If the issue cannot be resolved amicably, you will have to resort to legal action to deal with holdover tenants. The best course of action is to begin the eviction process. By adhering to local laws and regulations, you can successfully regain control of your property and prevent further legal disputes.

Bottom Line

Holdover tenancies pose significant risks for landlords, including loss of rental income, property damage and lengthy legal disputes. By understanding what constitutes a holdover tenancy, recognizing the dangers and implementing effective strategies for resolution, you can significantly reduce the risks associated with holdover tenancies.

If you need help dealing with a holdover tenant, consider the services of a reputable property management company, TE Johnson & Sons. Contact us today to learn more about our services.

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