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Dealing With Commercial Tenants Who Hold Over in Georgia

Poole Huffman, LLC

There are various circumstances under which a commercial tenant might continue to occupy a space after their lease term expired. There are also various circumstances where a landlord may decide it needs to eject that holding-over tenant. Landlords should take caution to be certain that their efforts to remove a holding-over tenant are fully compliant with the law and, to accomplish that goal, ensure they have representation from an experienced Atlanta commercial landlord-tenant lawyer.

One reason a tenant might hold over is that the tenant disputes that the lease term has, in fact, expired. That was the circumstance in one recent out-of-state landlord-tenant case.

The tenant business began leasing a space in Midtown St. Louis in 2003. The agreement’s provisions regarding renewals said that the tenant’s rental rate during a renewal period would be “market rent,” and then defined that term to mean “the lesser of rent quoted to prospective tenants within six (6) months prior to the expiration of the Lease term or rent paid by other tenants for comparable space within the surrounding area.”

The landlord and tenant made several changes to the agreement over the years. In 2013, they signed an amendment that said the lease term would end on October 31, 2020, and that the tenant had the option to renew for an additional five-year or seven-year period.

Critically, the amendment redefined “market rent” to mean “the rate shall be at the current market rate as negotiated and agreed between Landlord and Tenant.”

During 2020, the two sides negotiated a rental rate for a seven-year renewal, but the two sides never mutually agreed so, on October 26, 2020, with the lease period’s end just five days away, the landlord served the tenant with a demand that the tenant vacate the space by November 10.

The landlord later sued and not only won but won on summary judgment. Despite the tenant’s argument that it was not holding over but was occupying based on a renewal, the courts concluded that the language of the agreement as amended was clear. To have a valid and binding renewal, the two sides had to have agreed on a rental rate. Because they never did, that meant the lease expired on October 31 and after that, the tenant was a holdover tenant subject to removal via an unlawful detainer action.

Dispossessory Actions in Georgia

Here in Georgia, we call these procedures dispossessory proceedings, not unlawful detainer actions, and they’re covered under Title 44, Chapter, Article 3 of the O.C.G.A. Georgia law allows landlords to pursue dispossessory actions in several circumstances, including tenants holding over.

Before initiating a dispossessory action, the landlord must first make a “demand for possession.” The tenant will have seven days after being served with a dispossessory affidavit to file an answer with the court. If the tenant does not meet that seven-day deadline, you, as a landlord, may seek eviction as early as the eighth day.

As with any landlord-tenant dispute, it is important to avoid the urge to engage in taking matters into your own hands (or what the law calls “self-help.”) Instead, always utilize the proper legal procedures and make sure you are following the rules precisely. To that end, make sure you have the right legal team on your side. The knowledgeable Atlanta commercial landlord-tenant attorneys at Poole Huffman, LLC are here to help. If you’re a landlord needing to evict your holding-over commercial tenant, we have the skills and experience to assist. Contact our attorneys online or by calling 404-373-4008 to schedule your confidential consultation today.

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