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Frequently Asked Questions
- What is holdover tenancy?
- Holdover tenancy occurs when a tenant remains in possession of a property after the lease term expires without the landlord's express consent to a new lease. The consequences depend on the lease and applicable state law — in some cases the holdover creates a new month-to-month tenancy at the original rent, but in most commercial leases the tenant faces significant financial penalties.
- What are the most common holdover multipliers in commercial leases?
- For commercial leases, 150% and 200% of regular rent are the most common holdover rates. Some aggressive landlords draft leases with 300% holdover penalties. Residential leases are more commonly month-to-month during holdover with no penalty multiplier, though some residential leases do include penalty provisions.
- What happens if a new tenant is waiting for my space?
- If the landlord has a new tenant lined up and your holdover prevents them from moving in, you may be liable for consequential damages beyond just the holdover rent — including the new tenant's moving and storage costs, the landlord's lost new lease income, and potentially the cost of any delayed construction or improvements for the new tenant. These damages can dwarf the holdover rent itself.
- How do I avoid holdover situations?
- Plan your move well in advance. If you know you'll need more time, notify your landlord as early as possible and negotiate a formal lease extension or short-term agreement rather than simply holding over. Most landlords prefer a negotiated solution to the uncertainty and conflict of a holdover situation.