Two Tips For Protecting Yourself From Holdover Tenants

Sometimes tenants refuse to leave the property after their lease expires and they don't renew. Called holdover tenants, these types of renters can cost landlords thousands of dollars in lost revenue, damages, and legal expenses. While it is not possible to completely avoid holdover tenants, here are two tips for protecting yourself from them.

Establish Expectations in the Lease

Reducing your risk of having holdover tenants starts with setting boundaries and expectations at the beginning of your business relationship via the lease. Specifically, the lease should detail exactly what happens when the tenant's term ends and they continue occupying the property without renewing the contract.

For instance, you can state unequivocally renters must move out when the contract expires and eviction proceedings will begin after a certain date if they don't vacate. Alternatively, you can make it so the lease converts to a month-to-month agreement that lets you continue collecting rent while giving you the option to terminate the tenancy anytime with the appropriate amount of notice.

Because laws regulating landlord and tenant rights vary by state, work with a real estate attorney to develop a lease agreement that meets your needs and adheres to the legal standards required by your local government.

Avoid Accidentally Giving Them a Legal Defense

Evicting a tenant isn't as straightforward as many landlords would like. Even though you own the property, you have to convince the court you have the right to remove the tenants from it. One wrong move on your part could give tenants the ammunition they need to defeat the eviction attempt and continue occupying the home.

For instance, if you accept a rental payment from a holdover tenant, the court may interpret this as resetting the lease period and letting the tenant remain in the property for as long as the law allows. Doing any type of self-help eviction—such as changing the locks or shutting off utilities—could actually get you in legal trouble and result in you paying the tenant damages.

If you're not sure what your rights are or how to handle a holdover tenant, you should contact a real estate attorney at the earliest possible time. The lawyer can advise you on what your options are and how to avoid making missteps that can cost you time and money.

For more information about dealing with holdover tenants or help with other landlord and tenant issues, contact a local real estate lawyer.