How Long Can a Tenant Stay After the Lease Expires?
Many state laws and court decisions give landlords and tenants specific legal rights and obligations, because property management is not easy. Although a landlord can evict a tenant for a variety of reasons, notices and procedures vary depending on the context.
Most enter a lease or rental agreement sincerely, but there are times and many reasons when and why a tenant can stay and refuse to leave long after their contract has expired. From eviction to tenant holdover, let’s unpack this common landlord issue.
Can a Tenant Stay After the Lease Expires?
A tenant can theoretically stay as long as a landlord allows them to if they pay rent and the tenant occupies the property. If a landlord continues to accept rent payments after the expiration of a lease, the tenant and landlord implicitly enter a “holdover tenancy”. There are three types of tenancy that may occur if a tenant stays after the lease expires:
Tenancy at Will
A situation of tenancy at will occurs when the landlord agrees for the tenant to stay on the property after the lease ends until either party wishes to terminate the agreement. At this point, the party initiating the move, whether it is the landlord or the tenant, must follow the procedure described in the landlord-tenant laws in Illinois to do so.
If your tenants pay rent without a formal lease agreement with an end date, you both enter into a periodic tenancy. Periodic leases have no fixed term or end date. They are binding until the landlord or tenant gives notice. This can be a win-win scenario for both tenants and landlords; however, it does not hold the same gravitas as a binding lease agreement.
The main disadvantage of a periodic lease is the lack of a longer-term surety of rental income. Tenants may terminate their tenancy at a time when the rental market is in a slump, placing you in a precarious position, especially if you don’t have the capital to cover an empty vacancy. The option of increasing rent is often missed as the tenancies tend to continue without adjustments.
Tenancy at Sufferance
This is when a tenant refuses to leave after the lease expires and a landlord has not given them permission to stay. Although the tenant occupies the property without authorization, landlords are still advised to provide formal notice to the tenant.
It’s important to note the Chicago Landlord Tenant Ordinance requires landlords to give tenants 30 days’ written notice if they do not intend to renew their lease. Failure to do so enables a tenant to stay in the property for 60 days after the lease ends under the same terms and conditions as the previous lease.
What Is a Holdover Tenant?
Investopedia defines a holdover tenant as “a renter who stays in a property after the lease has expired. If a landlord continues to accept rent payments, a holdover tenant can legally occupy the property, and state laws and court rulings determine the length of the new rental term”. If a landlord does not accept further rent payments, the tenant is considered a trespasser and may be evicted.
Can you kick a tenant out after a lease expires? Holdover tenants are created when a lease expires and the landlord does not execute a new one. In this case, you are required to terminate the rights of the holdover tenants. Until you do so, the tenant has a right to remain on your property, even though they are technically not under any legal contract.
If they won’t leave after a lease expires, holdover tenants can become a liability by:
- Causing damage to your unit;
- Moving in unapproved pets or tenants;
- Paying less rent, affects your rental income;
- Moving out at a time that’s challenging to find new tenants;
- Postponing scheduled maintenance before the occupancy of new tenants;
- Not having control over when your property becomes vacant.
Note: If you want a holdover tenant to vacate your property, you should not accept rent from them and must legally treat them as a trespasser.
What to Do with a Tenant Holdover?
There are only two courses of action you can take with tenants staying past your lease. Either you have to treat your tenant as trespassers and legally evict them, or allow them to stay and continue to collect rent. If they’re extremely reliable, and you have a good relationship, then there’s no reason why they should object to signing a new lease or extending their old one. Many problems can be avoided by using the tenant screening service.
Tenants going through financial difficulty may be unable to honor a lease agreement, in which case you could discuss a temporary financial arrangement, especially if they have a good track record. However, if a tenant has proven unreliable, then it’s best to take the correct legal actions and evict them — just don’t accept any payments from them once your lease has expired, as this may compromise the process.
#1. Allow the Tenant to Stay
If you are satisfied with the current situation, you can let your tenants stay even after their formal lease agreement expires. By accepting their continued rent payments, you are implicitly agreeing to them staying on the property even in the absence of a written contract. Depending on the terms of the initial lease agreement and your local regulation, their tenancy may be considered as a periodic tenancy or a month-to-month agreement without a set end date unless a new lease stipulates otherwise.
Accepting rent during a holdover tenancy can lead to a tricky situation. You will no longer be able to evict them on the basis of overstaying their lease period. Therefore, the best policy is often to not accept rent payment once your initial lease expires and to negotiate a new lease.
#2. Start the Eviction Process
Illinois has judicial evictions, so if a tenant won’t leave after the lease expires, or they’re violating the lease, a landlord can’t start the eviction process on a whim. A judge has to order an eviction and only the county sheriff is allowed by law to evict a tenant or other occupant. Once notice has been properly served, and if the tenant has not complied with the terms, then a court case must be filed for possession of the property, as well as back rent if applicable.
The eviction process works in the same way as any other civil court case in Illinois; a complaint is filed, the tenant receives a summons and is served with papers, and the court has to issue a decision. If a landlord wins their eviction case, an Eviction Order must be filed with the County Sheriff to physically remove the tenants. (It’s generally advisable to hire an eviction lawyer, as they can efficiently navigate the complexities of eviction law, especially if a tenant decides to sue.)
#3. Offer Cash for Keys
The amount typically starts at 10% of the monthly rent but is negotiable. If you opt for this route, ensure the tenant's belongings have been removed, and you have the keys before paying them. Some landlords use this avenue as a last resort before pursuing an eviction.
#4. Negotiate a New Lease Agreement
If you are satisfied with your current tenants and they are willing to stay, but you would rather avoid a difficult situation as their formal lease agreement expires, your best bet is to renegotiate a new lease agreement with a set ending date. It may also be your best opportunity to introduce a lease increase if it is time for one.
What a Landlord Cannot Do to Get a Tenant to Leave
Getting a tenant to leave the property can be a stressful time for a landlord. However, no matter how frustrating it may be, they should always keep a cool head and stay professional while documenting all their interactions.
Under no circumstances should the landlord harass or threaten the tenants or increase the rent as a form of retaliation if the tenants do not immediately renew the lease. Rending the property inhabitable, either by changing the locks, shutting down utilities, or refusing to proceed to necessary repairs, is also illegal. Finally, the landlords cannot enter the property without authorization or remove the tenant’s personal property.
How to Prevent a Tenant from Staying After the Lease Expires
The most effective method to avoid a holdover tenancy is to remind them of their lease expiring at least 60 days before the last day of their term. You should also send another reminder closer to the time to ensure they are aware of moving-out requirements. If your tenant stays past the lease term, do not accept their rent payments.
Landlords that accept payments after an expired lease incur a variety of restrictions and enter a month-to-month tenancy, meaning they cannot legally treat their tenant as a trespasser and evict them. Instead, they have to issue 30 days’ notice. The same goes for the tenant if they wish to move.
Understandably, tenants who refuse to move place landlords in challenging positions where they may be left with no option but to take legal action. If you’re a property owner afraid of problems with tenants, you can hire a property management service to handle things. At 33 Realty, we are well versed in property law and regulations and can settle disputes between tenants and landlords. Contact us today!