Dealing with those holdover tenants
The question of “holdover” comes up often with commercial properties that we manage for our owners. This will occur when the original lease agreement has expired or terminated and the tenant does not have any option to renew contained in their original lease agreement. In its simplest definition, it is “maintaining possession of a property after the lease term has expired.”
The majority of lease agreements contain a specific “holdover” clause as part of the initial lease agreement. From a landlord’s point of view, it is not always a ‘negative’ to have a holdover situation.
In the current market we are experiencing in Southwest Florida and the changes in our commercial market, if the landlord does not have a replacement tenant for the space, allowing the tenant to remain may be a prudent business decision. By forcing the tenant to vacate, the landlord now still owns the vacant space that is non-rent producing. By allowing a tenant to remain, you not only have the benefit of the rental income, but may also be entitled to increased rent depending on how the holdover clause is defined in the original lease agreement.