REALWorld Law

Commercial leases

Security of tenure

Does a lessee have a right to continue to occupy the relevant real estate after the expiry of a commercial lease?

United States

United States

Generally speaking, a tenant’s right to occupy the leased premises ends when the term of its lease expires. However, under the common law ‘holdover rule’, a tenant remaining in possession after lease expiration without the landlord’s agreement may be treated by the landlord either as a trespasser subject to eviction or as a tenant under a lease for a new term, which term is generally equal to the rent payment periods set forth in the lease. For example, if rent is paid monthly, the new term would be month to month and subject to 30 days’ notice by either party to terminate. Most states have enacted legislation abolishing this rule – the terms of those statutes vary widely in how they govern the relationship between the landlord and the holdover tenant. Consequently, guidance with respect to the actions to be taken by a landlord to ensure timely vacation of the premises should be sought from a qualified local lawyer.