What is a Holdover Tenant? Rental Definition and Examples

Renters and landlords have certain rights and obligations set out in the rental agreement. The rental agreement outlines things like the amount of rent due, the length of the rental period, and the rules and regulations for living on the property. It also outlines the owner’s responsibilities.

A lease is a legally binding document between the tenant and the landlord. When a tenant breaks the terms of the lease, there may be financial or legal repercussions. One such scenario is when a the tenant refuses to move after the expiry of the rental period.

What is a residual tenant?

A residual tenant is someone who remains in the rental unit after the end of the rental period. The remaining tenant does not have explicit permission from the landlord to stay on the property but stays anyway.

Some remaining tenants continue to pay rent and some do not. Either way, the remaining tenant is occupying the apartment after the lease expires, which violates the terms of the lease. If the tenant does not pay rent, it is technically trespassing on the property at this point. If the tenant is a paying tenant, they must negotiate new lease terms with the property manager.

What is another name for a residual tenant?

You may also hear the term “tolerant tenancy” when referring to a remaining tenant. Simply put, this is the situation where the tenant stays on the leased property after the lease expires, without the landlord’s consent and without signing a new lease.

You will also hear the expression “rent at will”. A tenancy at will occurs when a tenant occupies a rental unit with the landlord’s permission but without signing a lease. Usually this happens on a weekly basis.

These two situations are polar opposites. The key thing to note is that a standby rental doesn’t have the landlord’s permission or approval to stay on the property, but does so anyway. The landlord took no action to evict the tenant.

What happens if the remaining tenant is still paying rent?

Some remaining tenants will continue to pay their rent even after the lease expires. If the tenant is paying rent, they are technically not in violation.

When a landlord accepts further rent payments from a remaining tenant, it is assumed that they are okay with letting the tenant stay. While the original lease has expired, the tenant and landlord can discuss a new lease term, such as a month-to-month tenancy or a new periodic lease, also known as a periodic tenancy.

As a landlord, if you accept rent payments after the end of the lease, it is essential to set up a new rental term. Otherwise, you could run into legal problems. Remaining tenants can legally occupy the apartment if the landlord continues to accept rent payments or remaining rent.

Accepting rent from a remaining tenant is tricky if the landlord wants to start legal eviction proceedings. A landlord cannot collect rent and take outstanding rent payments and simultaneously serve an eviction notice. If a landlord takes the monthly rent after the lease expires and then evicts the tenant, a district court could rule in favor of the tenant for wrongful eviction. The only time a landlord should accept rent after the lease expires is if the tenant owes an arrears of rent.

What are the rights of residual tenants?

Forced tenants have certain rights, even if they violate the terms of the lease. Local and state laws may vary, but generally the rights of a residual tenant are:

The right to a safe and habitable living space

A tenant has the right to a safe, clean and habitable space. This means that the owner must maintain the property, regardless of inheritance status. All tenants have the legal right to a habitable apartment.

The right to file a formal complaint against the owner

A tenant has the right to file a written complaint against the landlord if the landlord does not respect the tenant’s rights. Even when the tenant does not vacate the property, they still have the legal right to file a formal complaint if the landlord violates their rights as defined by local laws or state laws.

The right to continued public services

Landlords cannot shut off a residual tenant’s utilities to induce them to vacate the property. A new tenant and an existing tenant are both entitled to utilities.

The right to receive a formal notice before the owner enters the property

Whether it is a remaining tenant or a tenant maintaining the terms of the lease, all tenants have the right to receive written notice before the landlord begins to enter the property. A landlord cannot enter an apartment without notice.

The right to receive an eviction notice

If a landlord wants to evict a tenant, they must follow the proper procedure and start the eviction process in the right way. Landlords have the right to take legal action, but they must always obey the rules of the tenant and landlord, including providing written notice to evict.

What to do with the remaining tenants if the lease expires?

We have discussed how a residual tenant has rights. We also want to discuss the rights and options a landlord has when a tenant’s stay has entered the shutdown period. Landlords have a few different options to pursue with a tenant retainer.

Negotiate a new lease

The first option a landlord has is to negotiate new lease terms with the remaining tenant. This could mean renewing a one-year lease or moving to a month-to-month lease. When you have a remaining tenant who continues to pay rent, it is quite normal for this to turn into a month-to-month lease. In this case, the tenant can stay in their current space, the landlord can legally collect the rent, and a legally binding document protects both parties.

Start the eviction process

If the landlord does not wish to continue renting to the remaining tenant, they can begin the formal eviction process and a continuation proceeding. The landlord must follow the proper process and provide an official eviction notice that outlines everything the tenant needs to know about the next steps.

The remaining tenant can either move out at this point, or both parties may need to involve the court and court decisions determine which party is right. A tenant may have grounds to sue for wrongful eviction or the landlord may have the right to sue for trespass. The detention procedure will determine all of this.

Forced tenants — know your rights

A residual tenant is someone who stays in their apartment after the rental agreement has expired. A landlord can either negotiate a new tenancy agreement or take legal action, such as eviction, against the tenant. Regardless of the actions taken by the landlord, the residual tenant has basic rights that the landlord must respect.

As a tenant, it’s best to avoid a waiting period, in general, to maintain good credit, good reputation, and avoid lawsuits.

The information in this article is for educational purposes only and does not constitute and is not intended to constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice if they deem it necessary.