What to do when a Tenant Lives beyond his Lease Term?

Property Management Blog

If you are a landlord, you know tenants will come and go out of your rental property every now and then. It is a routine process and you cannot hope to have tenants live permanently in your rental property. Whenever a tenant moves out, you face the problem of vacancy. You want the unit to be occupied as soon as possible to resume the cash flow.

Ideally you want no gap between moving out and moving in

The ideal scenario for a landlord is when a tenant moves out and another tenant moves in within 24 hours. This is obviously a perfect situation as landlord does not suffer from any cash flow loss. But there are also situations when your tenant is not able to move on the scheduled date and time. May be the movers did not arrive on the scheduled day or your tenant found that the job he got in another city got cancelled at the last minute. May be the car of your tenant broke down and he could not move out. What do you in such a situation? Your next tenant is about to arrive, but the existing tenant has still not moved out of your property. You find yourself in a very awkward and embarrassing situation as you do not have a vacant unit to allow the new tenant to move in.

Just imagine the plight of the new tenant waiting to get inside

You just need to put on the shoes of your new tenant to understand the kind of peculiar situation he finds himself in. He has arranged a truck and all his household items are inside the truck, waiting to be offloaded. Can you ask the family of this tenant to sleep inside the truck for a night? How will the tenant manage the expense of the moving company for an additional day? It is not just about money but also the discomfort and inconvenience that are experienced by your new tenant.

Rest assured that your new tenant will be looking up to you to provide answers to his problems. He will blame you for all his problems as it is you and not him, who are breaking the contract by not having a unit ready to move in. This tenant can demand for compensation as well as an alternate arrangement to live in comfort with his family.

Your options in such a scenario 

You should always plan a gap of at least one day between moving out and moving in. You will only suffer the loss of cash flow for a single day but at least you will not feel the embarrassment and helplessness when the tenant has not moved out and next tenant has already arrived.

Insert a clause of fine of $100 per day for any tenant who lives in your rental property beyond the expiry of the lease term. This penalty will force the tenant to move out on time and have all his arrangements in time. Also, you will be compensated for his overstay that you can easily handover to your new tenant to placate him for his inconvenience.  You should explain this clause very clearly to all your tenants on the first day when they move in to your property. This way they will not have an excuse when they are not able to leave their unit on the scheduled day and time.

As a landlord, it is your right to ask the tenant to move out on time. You cannot expect some tenants to move out until you show them the door literally. Be prepared to act tough with some such tenants.

If you’d like to talk more about property management, or you need help with Everest Property Management, please contact us at Everest Realty. 

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