Posted by Bob on August 14, 2003 at 07:53:40:
Thanks JohnBoy
Lease Holdover - Posted by Bob
Posted by Bob on August 13, 2003 at 11:44:12:
This question is on a commercial property lease that has a holdover clause that states monthly payments during the holdover period will be at a rate of 150% of monthly rate. I assume a holdover is any period after the lease term when it goes into a month to month lease arrangement. Question #1) Is this assumption correct? Question #2) If the term of original lease and extensions expired 2 years ago and the lease has been month to month since, does this mean the tenant owes the 150% retro-active (since month to month arrangement)?
The original lease is a bit vague. It was inherited with a sale / purchase last year.
Thanks in advance.
Re: Lease Holdover - Posted by JohnBoy
Posted by JohnBoy on August 13, 2003 at 21:15:42:
Once the lease expires, the holdover goes into effect if the tenant still remains in the property.
As far as retro-active, hard to say, but doubtful. If the Landlord failed to enforce it and accepted the standard rent that was in the lease, I would think it would be hard to go back two years after the fact and try to enforce the tenant to pay up additional rent.
If you purchased the property two years after the holdover, your tenant has no lease. So you have no recourse on the expired lease that expired before you purchased the property. You need to have the tenant sign a new lease with you. Even if it’s only a month to month, if that is what you are willing to accept. If the tenant won’t sign a lease, start eviction!
Re: Lease Holdover - Posted by Bob
Posted by Bob on August 14, 2003 at 24:09:14:
Interesting. What you are saying is that there is no lease since it was in a holdover (month to month) situation? That is not inherited? What if the tenant moves out and wants the security deposit they paid to the previous landlord 8 years ago? Is that inherited? It was paid via closing in the sale, but the tenant moves out the 15th and I think will expect a 50% proration on August rent and eventually want a security deposit returned. We say even though we were given 30 days notice, we consider the month spent since we will not be able to re-rent this month. Any additional thoughts?
Thanks.
Re: Lease Holdover - Posted by JohnBoy
Posted by JohnBoy on August 14, 2003 at 06:20:45:
If the tenant is on a month to month tenancy, then they should not be entitled to a prorated rent for a partial month. They would need to give a 30 day notice prior to the first of the month for the following month. If they holdover past that date they would owe another month’s rent.
As far as the security deposit, if the prior owner gave you the deposit at closing then you should be willing to return it if the tenant is entitled to it after vacating the property, assuming they left the place in broom clean condition.
The 30 day notice does not take effect from the middle of the month to the middle of the following month. It’s from the first of the month to the first of the following month, unless the month to month was based on rent being paid from the middle of the month.
So lets say the tenant gave a 30 day notice in June where they would be vacating by the end of July. They don’t vacate by July 31st. They end up holding over until Aug 15th. They will owe the entire month of Aug rent.
A lot will also depend on the laws in your state pertaining to commercial leases. Laws pertaining to commercial leases are a lot different than laws pertaining to residential leases. You will need to talk to an attorney in your state that is well versed in commercial leases to see what binding effects the original lease may have, if any, and what the actual lease says if it does have any binding effect.
What does the lease say about holding over, besides rent being 150% of the original rent? Does it say the lease terms remain in effect when holding over? Does it say the lease is binding to the Landlord’s heirs, and assigns? Does the lease allow the tenant to hold over after giving a 30 day motice to vacate and prorate the rent based the days the tenant occupys the property? Does the lease allow the tenant to give a 30 day notice in the middle of the month to the middle of the following month?
It all depends on the laws in your state, whether the lease is binding after expiring two years ago and a new owner takes over the property vs. what the lease actually says. Only a qualified attorney in your state can answer this after reading the lease and knowing what the laws are in your state pertaining to commercial leases.