Hi, there! Joe White here from Grow Property Management, your trusted property management company in Philadelphia.
Today, I tried to conduct a move-out inspection on one of our rental properties. For anyone unfamiliar, a move-out inspection is something we do at the end of a tenant’s lease. It’s when we visit the property after the tenant has vacated, to assess any potential damage and determine what needs to be deducted from their security deposit. It’s a pretty routine part of the rental process. But when I got to the property this morning, May 1st, I discovered the tenants were still there. Their lease had officially ended on April 30th at midnight, so by the time I arrived, they should have been out. Instead, I found the place still fully furnished, with their personal belongings – and even their cat – still inside. Clearly, they hadn’t moved out.
Technically speaking, tenants have the right to be in the property until midnight on the last day of their lease. That’s why we schedule our move-out inspections for the next day. We also typically reach out to tenants toward the end of their lease, just in case they happen to move out a little early. If they let us know they’re out, we can begin the process sooner – getting the place back on the market or prepped for sale. That’s the ideal scenario. But in this case, not only did the tenants not move out early, they didn’t move out at all.
When I spoke with them, they were a bit rude and confrontational. Unfortunately, this kind of situation isn’t rare. Some tenants treat the lease end date like a soft deadline, figuring they can take their time moving their things out – even after their legal right to be there has expired. They often don’t understand that once the lease is over, they’re no longer the lawful occupants of the property.
Now, thankfully, this situation isn’t a crisis. The owner of the property had already decided to sell, so there’s not a new tenant waiting to move in. It’s just a delay in the selling process. But it could have been much worse. Imagine if we had another tenant lined up to move in today. We’d be scrambling – and potentially legally liable. That’s why it’s so important to have airtight lease agreements that include the right protective language.
As a property manager and landlord, I can’t stress enough the importance of writing strong leases. There are two main pieces of language every landlord should include in their lease documents. First, a clause that gives you flexibility around move-in timing for the next tenant. Things happen – repairs take longer than expected, or tenants fail to move out on time. You need wording that allows you to delay a new lease start date if necessary, to avoid putting yourself in legal or logistical jeopardy.
Second, and just as crucial, you need to include a penalty clause for holdover tenants – tenants who stay beyond their lease term. We do this as standard practice. The fees aren’t about being punitive; they’re about compensating the owner and the property manager for their time, disruption, and potential loss of income. In this case, someone from our team had to go out to the property for the inspection, only to find that it wasn’t vacant. That time is valuable. Then, of course, there’s the hassle of contacting the tenants, trying to get a firm answer on when they’ll leave, and the back-and-forth that often comes with that. It’s time-consuming, and we need to be compensated for it.
Fortunately, our lease had these penalties baked in. So now, even though the tenants failed to vacate, the property owner is going to be compensated through the holdover and per diem fees we charge. These fees are clearly stated in the lease, so there’s no confusion. The tenants were informed of the consequences from the very beginning. Once midnight hit on April 30th, they were no longer legally allowed to occupy the space. At that point, they became holdover tenants — essentially, trespassers. And our lease outlines exactly what happens in that scenario.
Again, this isn’t a disaster for the current property owner – they’ll be fine, and the delay in selling isn’t critical. But it’s a great reminder for other rental property owners or managers to double-check their lease agreements. Make sure you’ve got everything covered, especially around move-in and move-out logistics. Protect yourself with strong language, clear timelines, and fair penalties.
As a rental property management company owner here in Philadelphia, my goal is always to help others navigate these situations with confidence. Real estate investing can be rewarding, but it comes with challenges. And leases – well-written leases – are one of the most important tools you have in managing those challenges. So review your leases carefully, update them as needed, and stay proactive. That’s how you protect your investment, your time, and your peace of mind.
Happy rental property investing!
