Help with holdover tenants

[Tiffany Tan]

Hello everyone,I could use some advice regarding my situation. 

I have two tenants whose leases are set to end in two days. One of them has just expressed a desire to stay until November 1st and is willing to forfeit the security deposit.Option one is to trust them and allow them to stay the extra two weeks. However, there are potential risks. I don't know if they have any outstanding balances with the electricity and gas companies (as it's an owner-occupied duplex, I can't join the landlord program on either of those utility companies). Additionally, I'm uncertain about the unit's condition, and I might need the security deposit for any necessary repairs.

The second option is to renew the lease and extend it until November 1st, requesting payment for the two additional weeks. This would likely involve reapplying for Certificate of Occupancy. The risk here is that it might complicate the eviction process if needed since I would have accepted partial payment. Furthermore, my mortgage terms only allow for long-term rentals, and I don't want to breach those rules.I would greatly appreciate any insights you can provide on which option might be best. Thank you!

*I am in Philadelphia if that matters...

[Noah Bacon]

Do not accept the security deposit as rental income. As you have stated above, there are potentially numerous outstanding balances that the deposit is in place to cover. 

If you decide to renew the lease, do not accept partial payments if you have started the demand process and consult an eviction attorney. 

With uncertainty of the unit condition and short notice on an extension I would be skeptical. You can outline what the rate of a month-to-month lease would be for the tenants so they aren't starting a new short term lease that would put you in violation of your mortgage. Instead, they'd be rolling the same terms of their current lease into M2M with assumably a higher monthly rate.