Tenant hold over in Chicago?

Question

Wondering if anyone has ever had a problem with a tenant hold over at the end of a lease and what they've done about it.  This isn't a situation where we think the tenant intends to stay but our lease expirations are all at 5PM on the last day of the month.  We are thinking this tenant (1 of 3) intends to stay until the 1st because they can't move in their new place until then.  It also seems like they place isn't going to be clean either.  Unfortunately because of the CTLRO we didn't take security deposit (1st time ever) and opted for a very nominal move in fee.  Also curios what others do about their 'administrative' or 'move in' fees in lieu of security deposit.

We are looking for specific feedback on two items.

1. Has anyone ever had this happen and if so what did you do?

2. Any suggestions to keep this from happening as we come to the end of the month?

Standard language in City of Chicago lease;

16. Holding Over. Tenant shall be liable for double the Monthly Rent in the event that Tenant retains possession of all or any part of the Premises after the Ending Date of this Lease. Landlord may at its sole option, upon written notice to Tenant, create a month to month tenancy between Landlord and Tenant under the same terms and conditions of this Lease. Additionally, if Tenant retains possession of all or any part of the Premises after the Ending Date of this Lease and pays less than double the Monthly Rent and Landlord accepts payment, this shall become a month to month tenancy, and not a year to year tenancy, between Landlord and Tenant under the same terms and conditions of this Lease.

Thanks for reading and any insights.

Matthew Olszak · Answer

@Jerry N.  In the end, what's the worst that will happen? If the current tenants move out on the 1st, the new tenant will be pissed they have to wait until late night until the unit is cleaned, pissed they have to clean up the unit, pissed your maintenance guy has to come in for a couple days to fix stuff. Then they get over it in 3 weeks, or you offer a credit towards their rent and they get over it in 3 minutes.

The only time I've used the holdover clause is when we had damages anyway, so might as well add their holdover, or I've used it to pressure tenants to get out on time when we end their lease. BUT, pursuing it in court is going to be a waste of time and money unless you have a super-high-rent unit.

Start phrasing the conversations correctly to let them know after 5pm on the 30th is not an option, ie, "Hey Craig, the handyman is going to be there at 5pm on Saturday to start changing out the locks for the new tenant, just wanted to give you a heads up in case he shows up while you're moving out."And keep mentioning how many people are relying on this deadline in conversations - You, your new tenant, their current landlord, the new tenant there, your handyman, locksmith, cleaning crew, etc. Everyone is already scheduled and it would be insane for you to have to try to reschedule everyone and pay even more for them to come back out. Its not that you are pressuring them with "if you don't move you'll owe me $X", its more-so, "how in the world wouldn't you move, everyone else is relying on you doing so!".

Ray Harrell · Answer

And the worse that can happen is that you can be sued for not turning over a unit to the leaseholder on the lease date. At BEST they will be upset. What if they have all their stuff in a truck out front and nowhere to go? You have to pay for their truck, hotel, and everything else. The WORST that can happen is that they can sue you for damages, because you have essentially breached your contract.

Ray Harrell · Answer

All this looks good on paper, but if your current tenant hasn't moved out by the first, or second, or 20th, you cannot change locks, turn off utilities or anything else. This is why I'm a strong advocate for not signing a new lease on an occupied unit. The trouble it can cause is way more costly than losing a partial or full month of rent. You can make all the "threats" about changing locks, or maintenance guys that you feel you want to make. In the end, you are not allowed to change locks or disturb tenancy when someone is living there. And if they haven't moved out, they are still living there.

And if they don't care about vacating your unit, do you really think you will recover double damages in court?

Ray Harrell · Answer

It doesn't have to be in the lease. A lease is a WRITTEN CONTRACT, and if you don't turn the unit over on the date of the lease, you are in BREACH OF CONTRACT. Imagine if you were a renter and hired movers and took days off work to move into your new place, and once you arrived you learned that the previous tenants have decided they weren't ready to leave. You would be entitled to damages. Landlord can't just say, "Ooops, my bad. Find another place until they leave."

It's the responsibility of the landlord to make sure the unit is empty and ready for occupancy on the date of the new lease. And if you have "that" type of tenant currently living there, you can't make that guarantee until the current tenant has vacated.

Those who have A and B properties/areas don't usually have to worry about this, but this is not unusual in C and D properties/areas where tenants have trouble getting approved. Y'all gonna learn!

Matthew Olszak · Answer

If your lease allows for you to be sued for damages for not having the unit ready by whatever date, you need a new attorney.

Jerry N. · Answer

Thanks for your input @Matthew Olszak.  We always float the 'please let us know as you finalize your moving plans...' This time this particular tenant is not so cooperative and forthcoming which is part of the reason for the concern.

Tenant hold over in Chicago?

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