Holdover Tenant: How to Calculate Hold Over Rent Without Stress (+Detailed Guide)

Holdover Tenant
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There are great responsibilities and challenges associated with rental property. Dealing with a tenant who refuses to abide by the terms of the rental agreement is the most common one. These issues have a negative impact on your rental cash flow. However, resolving them quickly is more imperative. Let’s get started on Holdover Tenant, How to calculate holdover rent, Tenant Eviction, holdover letters as well as Florida eviction forms. I’ve also outlined a detailed guide for tenants and landlords.

Holdover Tenant Overview

This refers to a tenant who remains in a property after the expiration of the lease. However, If the landlord continues to accept payments, the holdover tenant can legally occupy the property. Similarly, If the landlord does not accept further rent payments, that means the tenant is trespassing. As such, if they do not move out, an eviction may be given to them.

Therefore, Landlords who want to avoid this mistake of winding up with a holdover tenant should be sure to include a clause in the original lease stating stipulated rules and regulations that protect their property.

Holdover Tenant
Image Credit: Hill & Hill (Holdover Tenant)

For example, a new year lease starts when the landlord accepts a rent payment after the first lease has expired. In some cases accepting payment from a holdover tenant always trigger a month-to-month lease. Therefore, If a landlord wants a holdover tenant to vacate his property, the landlord must not accept rent from the tenant and should treat them as a trespasser.

What can happen to me if I hold over?

There are several things that may happen to you if you holdover which might be embarassing. Therefore, you can try as possible not to wear a bad reputation.

  • A holdover tenant can be sued and as well pay your landlord for damages. Besides, this usually happens if a new tenant could not move in because you were still there. Mind you that your landlord to lose money.
  • Your landlord can have you evicted from the property.
  • You may have a new periodic lease if the landlord allows you to stay after the original lease has expired. Often times it’s usually a month-to-month lease except if the original lease states something different. An increase in rent doesn’t change the agreement made in the original lease. Thus your tenancy is subjected to all rule, terms, and condition of the original lease.

  What To Do if Your Tenant Holds Over?

  • You can evict the tenant and get any money they owe you. This money includes the unpaid rent, as well as any money you lost if a new tenant could not move in as expected under the lease.
  • You can let the tenant stay, and the tenant will owe you ongoing rent. Moreover, if you change your mind by exiting the tenant, you have to serve the tenant proper notice of exit. 
  •  If you intend to keep the tenant you can sue them for the previous rent they owe you.
  • You can also issue out a lease termination notice. This notice should state the reason for the termination, the date on which you must exit, and that the landlord will begin legal action if you don’t comply by the deadline. Such reasons can include the expiration of a lease, bad behavior such as having an unapproved pet, bringing a subtenant without informing the landlord, as well as making unapproved physical changes to the premises.

Rights of a Holdover Tenant

Holdover tenants have a tenancy at sufferance. This simply means the absence of objection without genuine approval. In addition, It is the opposite of a tenancy-at-will, which allows a tenant to occupy the property with the consent of the owner but generally without a written contract.

Therefore, if a landlord wishes to evict you, they must serve you with a notice of termination as regulated by state law but it varies from state to state.

However, you are not entitled to receive a notice of termination if your lease has expired but you have remained in the property without paying rent. In that case, a landlord can begin a holdover proceeding without notice.

Holdover Tenant letter

Before you start a holdover case, in getting rid of him, endeavor to give the tenant written notice known as a holdover tenant letter. The should be given to the tenant the right way. Then, If the tenant refuses to vacate after the landlord has given a proper 30-day notice, the tenant is considered a holdover tenant. This will actually cause the landlord to evict the holdover tenant to regain possession of the property. Below is a sample of a holdover tenant letter.

Image Credit: www.osc.state.ny.us (Holdover Tenant letter)

How to calculate Holdover Tenant Rent

Here is a sample if how to calculate holdover tenant rent as compile by OSC FALL CONFERENCE 2016

Holdover Lease Cost Calculation

OSC FALL CONFERENCE 2016

Hold-Over

All hold-over lease transactions must be submitted with a complete and accurate breakdown and justification of lease costs. Requirements:

  • State the amount of base rent. The amount must be verifiable in the lease.
  • State the number of months of hold-over. Hold-over periods should generally be limited to 12months.
  • Itemize all costs that add up to the STS value, including total base rent and any ancillaries for the
  • hold-over period. Ancillary costs must be divided into applicable parts, e.g. tax escalations,
  • operating escalations, utilities, parking, etc.
  • Subtract any amount remaining on the contract that is not needed through the end of the term. If all remaining funds will be needed before the end of the term, so state.
  • Moreover, If the lease will run out of money before the current end date, explain why (e.g., escalations were higher than expected).

Lease Cost Calculation Format:

monthly rent

  • other monthly expense (so state, if applicable)
    = monthly total
    x months of hold-over
    = hold-over subtotal
  • tax escalations (if applicable)
  • operating escalations (if applicable)
  • utilities (if applicable)
  • other cost (so state, if applicable)
    = hold-over total
  • amount remaining on contract
    = STS value
    Lease Cost Calculation Example:
    $10,000 monthly rent
  • $100 telephone
    = $10,100 monthly total
    x 12 months of hold-over
    = $121,200 hold-over subtotal
  • $5,000 tax escalations
  • $4,000 operating escalations
  • $500 electric
    = $130,700 hold-over total
  • $15,000 remaining on contract
    = $115,700 STS value

Furthermore if you find it difficult to calculate a holdover rent, seek the assistance of an expert.

Holdover Tenant Eviction

Holdover eviction is the act or process of removing a tenant from a property. Hence, It requires that a landlord must initiate a holdover proceeding, which is essentially an eviction case that is not centered on missed rent payments. As such, If a landlord wants a holdover tenant to vacate a property, the landlord should not also accept rent from the tenant. 

It is also the process that necessitates an understanding of landlord rights, obligations, state law, and local law. A holdover tenant eviction guidelines vary from one state to state. However, their content might share the same structure. Here are few ways to evict a holdover Tenant.

#1.Send a cure notice

Firstly, provide the tenant with a notice to resolve all issues. After receiving this notice. There should be a concrete agreement between both parties. The tenant can agree to make rental payments and establish a new lease. However, if he doesn’t respond to the notice, the landlord can look for a new tenant.

#2. Send a notice to vacate

If the tenant doesn’t respond to the cure notice, then the landlord should send a notice to vacate. This method varies from state to state as earlier said. At least, one month is enough for the tenant to vacate the property.

#3. Take the case to court

Finally, If the tenant refuses to vacate the premises after a full month of receiving the notice, the landlord can file an evict. The court will then notify the tenant of the eviction during the trial and a tenant who fails to comply will be ordered to vacate the property. Similarly, they might also order the tenant to make payments for holdover rent calculated by the landlord for the entire period spent. Therefore Landlords you should ensure that each step is in accordance with the law.

Holdover Eviction Forms Florida

In Florida, there are various forms that may be used for a holdover eviction. Evicting a holdover tenant, like any legal proceeding, might be a bit difficult. Thus, only If the tenants don’t react negatively then it’s possible to sail through the process.

However, It also depends on the Judge assigned to the case, because they vary wildly from pro-landlord to pro-tenant., Furthermore, if you expect to win the case, holdover eviction forms should not be used without consulting a Florida licensed and experienced attorney. Please visit this page FloridaLawHelp.org, for more information.

Conclusion

A holdover tenant is a tenant who continues to pay rent, even after the lease has expired. The landlord must also agree, or else eviction proceedings may occur. Although, the issue is often negated by the monthly rental clause in most tenancy agreements. Therefore, a landlord should give proper notice before ending a tenancy. Also, tenants should read leases carefully before the lease.

For this reason, I recommend you seek the assistance of an attorney or hire an attorney from the start.

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