Property Management Blog

What you should do when tenants stay beyond their lease?

Terry Mrochko - Sunday, August 25, 2019
Property Management Blog

As a landlord, it is your desire to have permanent tenants so that you do not suffer from loss of rental income. In real life, tenants come and go and moving out of tenants is a very common phenomenon. Your rental income stops, you need to prepare the unit, and make efforts to attract a new tenant.  The ideal scenario for you is to have the new tenant waiting when a tenant moves out so that there is no interruption in cash flow.

If you are thinking tenant moving out is your bad fortune, just imagine the situation where you see a tenant staying in your property even when the term of his lease agreement has expired. This is a double blow for you as on the other hand you are not getting any rent and on the other hand you cannot ask another tenant to move in as the unit is occupied by the nonpaying tenant.

This is not an imaginary situation as a moving out tenant may not be able to do so as his moving company has not sent the truck on the day of moving. It could be that the new job in another city that your tenant was hoping to join has been cancelled. His car has broken down and he does not have any other accommodation. As a landlord, wouldn’t you be considerate enough to allow your tenant to live for a day or two more? In most cases, landlords show kindness and allow the tenant to live for an extra day.

You may allow your tenant to continue to live for some more time but what will you do when you find that your new tenants have arrived with his belongings in your premises? It can be a real problem on hand for you. Put yourself in the shoes of your new tenant who has traveled a long distance from another state to live as a tenant in your property. Can you ask your new tenant to sleep inside the truck as your old tenant has not moved out yet? He must bear not just additional expenses for everything that he has arranged but also undergo immense discomfort.

You are answerable to not your old tenant but the new one who has left behind his home in the hope of getting a home in your property. In such a situation, it is you who is violating the contract and not the new tenant. He is well within his right to demand accommodation and compensation for all his troubles. He is experiencing inconvenience and monetary loss not because of his own volition but it’s because you don’t have the home ready for him to move in.

To avoid such a miserable situation, it is advisable to leave a day or two between moving out and moving in of the new tenants. This will mean that you will suffer from loss of rental income for 1-2 days. But at least your new tenant arrives only after your old tenant has moved out. You should have a clause in your lease that says the tenant has to pay a charge of $100 for every extra day that he lives beyond the term of the lease. This will encourage your tenant to move on the dot to avoid paying harsh penalty. Also, you can pass on this money to your new tenant as a compensation for all the hassle he has to undergo. He will understand your position and appreciate your kindness for paying his bills for the extra day or two that he must stay outside your property.

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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