When a lease term ends and the tenant remains, the resulting arrangement depends on the lease, the landlord’s response, and state law.

Landlord’s election. Traditionally, the landlord may treat the holdover as a trespasser and evict, or elect to hold the tenant to a new tenancy. Once the election is made — usually by accepting rent — it binds.

Term of the new tenancy. Depending on the jurisdiction, it may be month-to-month, or a periodic tenancy measured by how rent was paid, or in some older authorities a new term of up to a year. Modern commercial leases specify month-to-month to avoid the uncertainty.

Holdover rent. Commercial leases commonly provide for holdover rent at a multiple of the last base rent, plus consequential damages where the landlord has a succeeding tenant. Multiples of one and a half to two are common and generally enforced; punitive multiples may be attacked as penalties.

Consequential damages for delaying a new tenant’s occupancy are the real exposure and are frequently excluded elsewhere in the lease. If the landlord wants them, the holdover clause must carve them back in.

Practical handling. Send written notice before expiry stating the position; avoid accepting rent without a reservation of rights letter; and if an extension is being negotiated, document that occupancy pending agreement is on stated terms.