Contributed By McGuireWoods LLP
In some instances, parties may negotiate for a tenant to have a limited period of time to remove its property after a lease expires, but most leases require a tenant to vacate the premises and remove its property on or prior to the expiration date. Accordingly, in most cases a tenant does not have the “right” to occupy its premises after termination or expiration.
If a tenant fails to timely vacate the premises, it becomes a “holdover tenant”, which may result in the tenant becoming a month-to-month tenant, a tenant at will, or a tenant at sufferance, which enables the landlord to exercise varying degrees of termination rights (for example, a month-to-month tenancy may be terminated on 30 days' prior notice). In all cases, commercial leases typically provide that “holdover rent” will immediately begin to accrue at an increased rate, often as much as double the base rent that was payable at the expiration date. In addition to holdover rent, many landlords reserve the right to pursue a holdover tenant for other damages that may be suffered on account of the holdover, including consequential damages.
Finally, most commercial leases also specify that if the tenant fails to remove its personal property by the expiration date, the property will be deemed abandoned. In such cases, landlords usually reserve the right to remove, store and/or sell the property at auction, all at the tenant’s cost.