Although lease agreements outline the term of a tenancy, including the expected move-out date, some tenants may request an ‘extension’ from their landlord. While this is not a complete renewal of the lease agreement, it does come with monthly rent and other financial obligations, creating a unique situation with certain restrictions on you and your investment.
In this article, the team from Young Management explains what a holdover tenant is and how to approach such a situation.
Who Is a Holdover Tenant?
A holdover tenant is one who continues to stay on the premises once the lease has legally ended. Generally, they’re allowed to stay on the premises indefinitely under a variation of a month-to-month lease.
However, a holdover tenant creates a gray area for a landlord’s investment property. In most cases, the tenant will request to maintain the terms of the rental agreement, in particular the rent payment structure and utilities, without having their landlord’s explicit approval or objection to them staying.
This can complicate things if and when a landlord may want the tenant to leave, so it’s important to consider all options and review Missouri laws before agreeing to give a tenant an extension once their lease term comes to an end.
What Options Do Landlords Have?
In most cases, landlords have two options: They can either choose to keep the tenant or evict them from the premises.
Finding and retaining a good tenant is not always an easy task. Once you’ve found a quality tenant that pays their rent on time and complies with the terms of the lease agreement, you may want to encourage them to stay on the property long-term. In that case, the ideal solution would be to create and administer a new lease agreement for the tenant.
A lease agreement protects your interests as a landlord and clearly defines the landlord-tenant rights and responsibilities. Be it a long-term or month-to-month rental contract, it’s important to have all the agreed-upon terms in writing and signed by the tenant.
If a landlord does not want to renew the lease agreement and the tenant refuses to leave, then eviction may be the most suitable option. For a landlord to move forward with an eviction, they should first stop collecting rent from the current holdover tenant. Otherwise, continuing to accept rent may create certain legal issues.
It’s crucial that landlords follow the Missouri eviction process and remain compliant throughout the entire procedure. You may be required to file documents in court, serve proper notice to the tenant, and liaise with other relevant parties. Make sure to follow all eviction provisions accurately to avoid any potential conflicts.
Avoiding Holdover Tenants
To avoid potential complications, landlords should always try to avoid having holdover tenants on their premises. If you’re not sure how to prevent that from happening, just follow the advice provided in this article, and/or reach out to a property management company for additional help.
Include Important Clauses in the Lease Agreement
A lease agreement is a rental contract that can help landlords protect their interests and investments.
Lease agreements should always specify when the term comes to an end and when tenants will be expected to move out. It should also state potential penalties for staying on the premises after the tenancy has ended, such as additional fees or an eviction. Make sure the tenant is aware of and understands these provisions before signing the lease.
Notice of Expiration
To prevent tenants from claiming they were not aware that their lease was coming to an end, make sure to provide them with a written reminder of the move-out date.
It’s recommended that landlords send their notice about 45 to 60 days before the termination of the lease agreement. The notice should contain all the potential penalties for violating the lease agreement, and detail any additional expectations, such as performing end of tenancy cleaning or conducting necessary repairs.
Even with a thorough lease agreement or a notice of expiration, some tenants may ask their landlord to stay on the premises for a few extra days as their new unit gets prepared.
Being a landlord often requires understanding and flexibility. If the tenant asking to stay for additional days has proven to be trustworthy, you may consider letting them stay under a daily rental agreement to avoid a holdover tenant situation and create necessary boundaries.
Conclusion
If you’re a landlord looking for help managing their rental properties, consider working with the leading service provider in Kansas, Young Management. Our property management company has over 40 years of experience guiding and advising our clients on various rental matters.
At Young Management, we only hire the best, ensuring our clients receive quality service. Get in touch with us today to schedule a sit down with one of our expert property managers; they would be happy to discuss how to properly and comprehensively manage your property’s needs!