How does a holdover work?
When a fixed-term lease expires and the tenant stays, the landlord can usually either accept the tenant on new terms or begin the legal process to recover possession. In many places, accepting rent can create a periodic tenancy, such as month-to-month, on the old terms.
Commercial leases often include a holdover clause setting holdover rent at a premium, commonly 125% to 200% of the last rent, and making the tenant liable for losses if a new tenant cannot move in. Residential holdovers are more heavily regulated, and eviction must follow local procedures.
See also: Contracts & renewals and Notice to vacate template.
What does holdover rent look like?
Example (illustrative figures). A commercial lease ending 30 June has rent of $10,000 a month and a holdover clause at 150%. If the tenant stays through July without a renewal, July's rent is $15,000, and the landlord may also have a claim for losses if a new tenant was due to move in.
Related
Related terms
