A holdover tenant is a renter who stays after their lease agreement ends. A tenant doesn't always have the legal right to stay on, but in New Jersey, most people renting a residence do not have to move out when their lease expires. However, a landlord has the right to charge a tenant higher rent to stay on.
According to New Jersey law, a property owner can double the rent to holdover tenants, as well as make other changes to the lease. If the renter does not comply with the changes or refuses to pay the additional rent, the landlord can begin the eviction proceedings.
Defining Holdover Tenants
If a renter continues to live in their unit after their lease expires, they are holdover tenants. If a landlord or property owner continues to accept their rent at the current rate, they can legally stay. If the landlord refuses the tenant's payment, the law generally considers that tenant to be a trespasser. Tenants in this situation who don't leave of their own accord face eviction.
A landlord can avoid dealing with a holdover tenant if they include a clause in the lease detailing what happens when that contract expires. This will protect their interests, including the property. A common example of this type of clause is the conversion to month-to-month after a year-long fixed lease.
Accepting Rent From Holdover Tenants
The implications of accepting rent from holdover tenants varies by state and local jurisdictions. A landlord who receives rent from a holdover tenant must reset the lease to a fixed-term in some locations. For example, if the original lease was for a term of 12 months, a new year-long lease will start when the landlord accepts rent after the expiration of the first lease. In other locations, the rent payment would start a month-to-month agreement.
When attempting to remove a holdover tenant, the property owner usually initiates an eviction proceeding. The process for removing a holdover tenant usually occurs in small claims or eviction court.
Types of Holdover Tenants
A holdover tenant can fall under one of two categories:
- Tenancy at sufferance: While the landlord doesn't necessarily object to their staying in the unit, they have not approved them to remain, and eviction could be imminent.
- Tenancy at will: Either the landlord or tenant can terminate the tenancy at any time. In New Jersey, this occurs when a tenant enters a unit with the landlord’s permission and there is an indefinite length to the tenancy. According to the law firm of Earl P. White, a landlord must give a tenant at will up to three months' notice to quit.
Landlords who want to evict holdover tenants typically must serve them with a notice, precipitating an eviction proceeding. The notice will usually detail the reasons for eviction, the date on which the landlord wants them to move, and the legal action the landlord will take if the tenant doesn't comply. Holdover tenants who stay on the property but do not pay rent after their lease expires will not always receive this notice. Instead, the landlord can start eviction proceedings without it.
New Jersey Law and Holdover Tenancy
In New Jersey, tenants do not have to move out when their lease ends. Most residential renters can continue renting a unit unless the landlord has "good cause" reasons for evicting them. If the lease has expired, it automatically becomes a month-to-month contract with its former terms still intact, according to N.J.S.A. Section 46:8-10.
A holdover renter can remain in their unit indefinitely if the landlord does not have good cause to evict them as long as they pay their rent. State law allows for reasonable changes to a lease's terms, but terminating the lease without good cause is not one of them.
Raising a Holdover Tenant's Rent
For holdover tenants who refuse to leave after their lease ends, a landlord has the option of raising their rent or changing the terms of the lease. If the tenant refuses to accept either of these options, the landlord can begin eviction proceedings. The landlord can either send a notice to quit which informs the holdover tenant that it is their responsibility to relinquish possession of the unit by a particular date, or send a rent increase and lease change notice detailing the new terms.
When a holdover tenant refuses to pay the new rental amount or accept the new terms of the tenancy, the property owner has reason to begin eviction proceedings. Note that any changes the landlord makes to the original lease the court must consider "reasonable." It will consider the amount of the rent increase, the current market rate in the area, and the property's profitability.
Double Rent for Holdover Tenant
New Jersey law has two provisions that allow landlords to double the rent for holdover tenants. According to N.J.S.A. Section 2A:42-5 and Section 2A:42-6, if a renter gives notice to the landlord that they intend to leave but fail to do so, the landlord can double their rent. Also, if the tenant willfully stays in the unit after the landlord gives them written notice to leave at the end of their lease, this also allows the landlord to double the amount of rent. However, the court can modify these laws – for example, in one instance, a landlord was allowed to triple the rent of a holdover tenant.
In the case of Mangano v. Cantor in 1998, a tenant wanted to enforce a new lease that they had discussed with the landlord, but not executed; a lower court denied their claim, but allowed them to remain in the unit for a month. The landlord countersued for triple the rent, and the case was remanded for trial after the appeal of the lower court’s decision. The landlord had a copy of the expired lease which stated if the tenant became a holdover tenant, they had an obligation to pay three times the rent, and the court agreed.
The landlord's ability to increase a tenant's rent in this fashion depends on the terms of the lease, but if it states that a tenant can attain periodic tenancy or tenancy at will after their lease expires, these laws do not apply.
"Good Cause" Eviction and New Jersey's Anti-Eviction Act
Landlords in New Jersey cannot evict renters without good cause, according to New Jersey's Anti-Eviction Act. These reasons include:
- Nonpayment of rent.
- Not paying a rent increase.
- Consistently not paying rent on time with no legal justification for being late.
- Disorderly conduct that violates the other tenants' peace and quiet.
- Damage or destruction to the unit or common areas on the property.
- Violating the landlord or property owners' rules and regulations.
- Violating the terms of the lease regarding the landlord's right of entry.
- Committing an illegal activity that violates a public housing lease.
- Violating housing or health code violations.
- Landlord or property owner wishes to remove the unit from the rental market.
- Landlord or property owner wishes to convert rental units to condos or co-ops.
- Landlord or property owner wants to live in the rental unit.
- Tenant refuses to accept lease changes at the end of their term.
- Landlord or property owner sells to someone who will close the property.
- Tenant worked for the landlord or property owner and their job has ended.
- Tenant earns a drug offense conviction while in the unit.
- Tenant earns a conviction for assault or threats against the property owner, family or employees of the property.
- Tenant has human trafficking violations.
What the Anti-Eviction Act doesn't cover, the Summary Dispossess Act does. The reasons for eviction are much the same as those listed above, but cover businesses renting commercial property. They are:
- Failure to pay rent.
- Disorderly conduct that violates other tenants' peace and quiet or that of the landlord or community.
- Holdover tenant remains despite receiving a property owner's notice to vacate.
- Tenant willfully causes damage and destruction to the property or injury to others while on the premises.
- Tenant repeatedly violates the property owner's rules and regulations.
- Tenant violates the terms of the lease regarding the landlord's right of entry.
Landlord-Tenant Eviction Process
Before filing for eviction, a landlord may need to give more than one eviction notice to a tenant. This may be a Notice to Quit or a Notice to Cease, depending on the circumstance of the eviction. If the landlord fails to comply with legal proper notice requirements, the court can dismiss the removal action.
A Notice to Cease warns a renter to stop their "just cause" behaviors under the terms of the Anti-Eviction Act. This warning notice gives the renter the option to stay and correct their breach and includes the specific details of their wrongful conduct. These behaviors can consist of disorderly conduct, breaking the lease rules or consistently paying rent late.
A notice to quit details the reason for a renter's eviction. The landlord must serve the tenant with this notice either in person or by leaving a copy at the residence with a family member over the age of 14, or through certified mail. If they do not claim receipt of the certified mail, the landlord can send the notice via regular mail.
Removing a Tenant After Eviction
As in other states, landlords should not take matters into their own hands when removing a tenant, such as changing the locks or canceling utilities. Landlords can evict someone only by winning an eviction action through the court. And, they cannot physically remove a tenant themselves even after a court order for eviction; only law enforcement can do this legally. If the landlord tries to force a renter out, they may face a lawsuit by the tenant.
If a tenant leaves their personal effects behind, the landlord must notify them before disposing of the property by sending them a notice via certified mail or first-class receipt. This notice must contain information telling them they have 33 days to claim their property. If the renter does not claim the property in that time period, the landlord has the option of either selling or otherwise disposing of it. They can also charge the renter for storage during the 33-day window, according to New Jersey Stat. Ann. Section 2A:18-72 and Section 2A:18-84.
Evictions and COVID-19 in New Jersey
At the start of the COVID-19 pandemic in March 2020, New Jersey Governor Phil Murphy immediately suspended evictions in the state. This eviction moratorium stated that no tenant removal would occur as the result of a proceeding, with the only exceptions being if the tenant was dangerous to others or displayed violence. The governor did not stop court proceedings, but stopped removals and lockouts of tenants. The New Jersey Supreme Court, which controls eviction hearings, has suspended removals during the pandemic.
The eviction moratorium in New Jersey is set to continue until two months after the governor's office declares the pandemic over or otherwise issues an executive order. Property owners and government officials can then resume court proceedings and tenant removals. Tenants who believe their eviction is imminent despite the moratorium should call law enforcement in their area.
- Case Text: N.J. Stat. Section 2A:42-6
- Earl White: How to Evict a Tenant in New Jersey
- Accidental Rental: 3 Quirky NJ Eviction Laws You Should Know
- Justia: 2016 New Jersey Revised Statutes Title 2a - Administration of Civil And Criminal Justice Section 2A:18-72 - Disposal of Remaining Personal Property Abandoned by Tenant
- The State of New Jersey: Information on Rental Property and Evictions under Executive Order 106
- Justia: 2013 New Jersey Revised Statutes Title 46 - Property Section 46:8-10 - Tenant Holding Over; Tenancy From Month to Month
- Justia: 2013 New Jersey Revised Statutes Title 2A - Administratopm of Civil and Criminal Justice Section 2A:18-61.2 - Removal of Residential Tenants; Required Notice; Contents; Service.
- Investopedia: Holdover Tenant
- Nolo: The Eviction Process in New Jersey: Rules for Landlords and Property Managers
- NOLO: Tenant Defenses to Evictions in New Jersey
- Legal Counsel NJ: When Leases Expire and Tenants Don’t Have to Leave
- Earl White: Types of Tenants in New Jersey
- This article does not constitute legal advice. Consult with an attorney who practices in New Jersey for a thorough understanding of your rights and responsibilities in an eviction proceeding.
Michelle Nati is an associate editor and writer who has reported on legal, criminal and government news for PasadenaNow.com and Complex Media. She holds a B.A. in Communications and English from Niagara University.