Usually, upon the termination of a commercial lease, the tenant has a legal duty to surrender possession of the premises to the landlord. Although this duty may be expressly written in the lease, it is generally implied in every lease. A tenant who does not surrender possession of the premises after the lease expires, and who, instead, remains in possession of the premises, is holding over. Often landlords and tenants misunderstand their rights, duties and liabilities when a tenant holds over. The legal implications that arise from holding over should be thoroughly reviewed and analyzed before taking legal action against a holdover tenant.

A holdover situation often arises when a tenant, while in the process of negotiating with the landlord for a new lease, remains in possession of the premises even though the term of the original lease has expired. During this time, the landlord may consent, either impliedly or expressly, to the tenant holding over in hopes of having the tenant agree to enter into a new lease with more favorable terms, i.e., increased rent. This situation raises important questions. Even though the lease term has expired, are the remaining terms of the original lease still enforceable? Is the holdover tenant obligated to pay rent in the amount that was required under the original lease? Can the landlord unilaterally increase the rent for a holdover tenant? Does a tenant, merely by holding over, become obligated for another full lease term under the same terms of the original lease? Does the landlord’s acceptance of rent from a tenant holding over mean that the landlord has consented to a renewal or extension of the original lease?

Consider the following hypothetical situation. Tenant has a one year lease with landlord for space at a local shopping center where tenant operates a jewelry repair shop. Under the lease, the tenant is required to pay the landlord monthly rent in the amount of $3,000. Shortly before the completion of the one year term of the lease, the landlord and tenant engage in good faith negotiations for a new one year lease of the same space. The landlord is seeking to increase the monthly rent to $4,000.00, while the tenant is only willing to agree to a marginal increase in the rent. Negotiations continue after the lease term ends, and the tenant continues, with the consent of the landlord, to remain in possession of the space, and continues to pay the monthly rent that was set by the original lease. Three months after the lease term expires, lease negotiations break off because the parties cannot agree on a fixed amount of rent for a new lease. Accordingly, the landlord sues the tenant to regain possession of the space so that the landlord can lease the space to another tenant. The holdover tenant, in turn, claims that he is entitled to remain in possession of the space for another year under the same terms as the original lease, and that the landlord has consented to this by continuing to accept the rent from the tenant during the holdover period.

Several important issues arise from this scenario. First, under Connecticut law, the mere act of holding over does not create a new tenancy. In other words, the mere act of holding over during the course of lease negotiations, even with the consent of the landlord, does not constitute renewal of the terminated lease or the start of a new lease under the same terms as the original lease. Even if the landlord accepts rent from the tenant under the terms of the expired lease, a new tenancy is not created.

Connecticut’s Holding Over Statute, Conn. Gen. Stat. § 47a-3d, mandates this conclusion. The Holding Over Statute provides, in relevant part, that “[h]olding over by any lessee, after the expiration of the term of his lease, shall not be evidence of any agreement for a further lease.” The plain language of the Holding Over Statute prohibits the erection of a new tenancy simply because a tenant holds over. Accordingly, under Connecticut law, holding over by a tenant after the expiration of a lease, in and of itself, is insufficient to create a lease by implication.

It is important to recognize that, under Connecticut law, a holdover tenant becomes a tenant at sufferance with no legal right to possession of the premises. Accordingly, depending on the specific facts of the case, a landlord may properly sue a holdover tenant and regain possession of the premises by commencing a summary process eviction action under one or more of the following statutory reasons: (1) “lapse of time”; and/or (2) “originally had a right or privilege to occupy such premises, but such right or privilege has been terminated.” Furthermore, the landlord may also sue to collect the rent and/or use and occupancy for each monthly period that the holdover tenant occupies the space. The landlord, however, would not necessarily be entitled to collect rent at a higher amount than provided in the original lease.

In conclusion, commercial landlords should proceed with caution when dealing with holdover tenants. Issues such as what constitutes holding over, damages for withholding possession, and the kind of tenancy created by holding over, should be carefully scrutinized before taking legal action. Doing so will likely lead to gaining possession of premises from a holdover tenant more quickly and efficiently