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The CRE Almanac

Holdover Tenancy

Published 2026-08-11

A holdover tenancy arises when a tenant remains in possession after its lease term expires. Commercial leases typically address it in advance: a holdover clause sets the rent for the overstay — commonly a multiple of the final month's rent — and says whether the tenancy continues month to month or leaves the tenant exposed to damages.

What the clause typically says

Holdover provisions usually convert the overstay into a month-to-month or at-sufferance tenancy at premium rent, often expressed as 150% or 200% of the last month's base rent. Beyond rent, the clause allocates responsibility for what the overstay breaks downstream: some leases expose a holdover tenant to the landlord's consequential damages — the cost of a delayed delivery to the next tenant — after a notice period, while others make premium rent the landlord's sole remedy.

Why it matters to both sides

For landlords, a holdover can unwind the next deal: a new lease with a delivered-by date, a construction schedule, or a pending sale can all hinge on the space coming back on time. For tenants, holding over without an agreement is expensive and precarious — premium rent, uncertain status, and exposure that can dwarf the convenience of a few extra months. The well-managed version of a holdover is a negotiated short-term extension papered before expiration, not after.

What to watch for

  • Whether premium rent is the landlord's sole remedy or sits alongside a damages claim.
  • Whether accepting holdover rent creates a renewal — clauses usually disclaim this, but a sloppy course of dealing can blur it.
  • Interaction with options: an unexercised renewal option generally dies at expiration, so a tenant counting on staying must act before the deadline, not during the holdover.

In your documents

Holdover risk is fundamentally a dates problem: it begins where the recorded term ends. Sevrel's critical-date tracking is built around keeping recorded lease end dates visible ahead of time, so an approaching expiration prompts a deliberate decision — renew, extend, or plan the turnover — before the holdover clause takes over. Verify every deadline against the governing lease.