I’m hearing on the Legal Hotline from members who want to know if the holdover provision in leases is for the tenant’s use if the tenant needs extra days after the agreed-upon termination of the lease.
The holdover provision, outlined in the Seller’s Temporary Residential Lease (TXR 1910; TREC 15-5), the Buyer’s Temporary Residential Lease (TXR 1911; TREC 16-5), and the Residential Lease (TXR 2001), is not for the purpose of providing tenants with a contingency if the tenant needs extra days. Rather, it is a punitive measure because the tenant is technically in default since the tenant has not complied with the agreed-upon date of termination as outlined in the lease.
Accordingly, the landlord may be entitled to additional remedies beyond the fee outlined in the holdover provision if tenant stays beyond the date agreed upon for termination of the lease.
—Traci Jackson, staff attorney
I see so many agents put $100 in that space. Not very punitive. Cheaper than moving to a hotel. I think it was definitely meant to be something much more like maybe $500?
I place a minimum of $500, and $1000 if I think there is a possibility they will try and take advantage of it or need extra incentive. The only time I have seen a seller take advantage of this was an owner/agent and he found out very quickly he better get out of the way because the buyers were moving in.
I completely agree!
Great clarification. Holdover means they’ve stayed longer than legally and contractually allowed.
Of course it’s always the clients decision and I always recommend a very high dollar amount to motivate them to get out.
Great article. I will be changing my dollar amount.
thanks for the clarification this is becoming more of an issue with this tight housing market that needed to be addressed
Thanks for the clarification. I use the rental market rate for the area in which the transaction is taking place – and in hot rental areas, I recommend adding an extra 20% to 30% to the equation. Never had any issues with tenants moving out.
What if all parties agree to extend may be due to a delayed appraisal or something, would a new lease be in order or an amendment?
Traci is an excellent attorney!
I have talked to her a few times and her advice is always wonderful!
I have been using it as a soft punishment – amounts that would be punitive over time but reasonable for a couple of days, like $250/day. If the buyer is OK with a somewhat soft possession date and giving the seller a short cushion makes sense, it provides a manageable solution. Suppose the seller is waiting on a new home to complete and that closing gets pushed back 4 days further than expected. 4 days for $1,000 is likely a win-win. I understand that other remedies could be exercised for a long holdover. It is important to discuss the consequences… Read more »
I have always understood the “intention” was to be punitive but I am curious if there is any case law addressing the holdover. It doesn’t seem like a clear violation since the addendum contains the provision for it.
Will you please elaborate on or provide an example(s) of additional remedies landlord may be entitled to if tenant stays beyond the termination date?
Yes, I too would like to hear example(s) of additional remedies landlord may be entitled to if tenant stays beyond the termination date? Other than the obvious of “contact a RE attorney”.
Always needs a decent amount here. I usually do $250 or more. Also should start getting a deposit too since I’ve had sellers run out of time on my buyers and just leave a ton of trash, didn’t clean the house, etc.