Commercial Lease Expired and the Tenant Stayed: Holdover Rules in California

Last updated: November 2026. Reviewed by Pavel Kolmogorov, California business litigation attorney (State Bar No. 321018).

When a commercial lease expires and the tenant stays, what happens next depends on the landlord. If the landlord accepts rent, California presumes the parties renewed on the same terms, month to month where rent is paid monthly. (Civ. Code, § 1945.) Either side can then end the tenancy on at least 30 days' written notice. The landlord can also raise the rent on 30 days' written notice. The lease or a small-tenant statute can change either period. Kolmogorov Law, P.C. handles these disputes for commercial landlords and tenants.

Call (909) 235-6116 or contact us online to discuss a commercial tenancy that has outlasted its lease.

The term ended and nobody signed anything

The term ended, the tenant kept the keys, and rent kept changing hands. Months later one side wants out, or wants more money. Their rights now come from the lease's holdover clause and a few short statutes. This page covers commercial space only.

Start with the lease. A holdover clause says what tenancy follows the term and at what rent. If the lease is silent, the landlord's conduct decides the tenant's status.

• The landlord accepts rent. The parties are presumed to have renewed on the same terms and for the same time, but not beyond one month when rent is payable monthly, and never beyond one year. (Civ. Code, § 1945.)
• The landlord does not consent. A tenant who continues in possession after the term expires, without the landlord's permission, is guilty of unlawful detainer. The statute states no notice requirement for a fixed term that has run out. (Code Civ. Proc., § 1161, subd. 1.) Courts call this occupant a tenant at sufferance.

Is a 150 percent holdover rent enforceable?

A holdover clause may set the rent at a multiple of the last monthly rent, which a tenant may attack as a penalty.

In a 2020 decision, a divided Court of Appeal rejected that argument on the facts before it. A warehouse lease set holdover rent at 150 percent of base rent. The majority held that the charge was a graduated rent for continued use of the property, not liquidated damages, so the liquidated damages statute did not apply. The tenant had not proved coercion, and it could have avoided the higher rent by leaving. (Constellation-F, LLC v. World Trading 23, Inc. (2020) 45 Cal.App.5th 22.) One justice dissented and would have treated the clause as a penalty, because the parties never tried to estimate the landlord's loss.

Even under that statute, a clause in a commercial contract is valid unless the party attacking it proves it was unreasonable when the contract was made. (Civ. Code, § 1671, subd. (b).) Our page on liquidated damages explains that test.

When the landlord can raise the rent

On a month-to-month tenancy, the landlord may change the terms of the lease, rent included, by written notice. The change takes effect no sooner than 30 days after the notice. A tenant who stays after that date is bound by the new terms. (Civ. Code, § 827, subd. (a).) The section sets no ceiling on the amount. The parties may agree in writing to a shorter notice, as little as seven days before the end of a rental period.

For a qualified commercial tenant, an increase of more than 10 percent over the rent charged during the prior 12 months requires at least 90 days' notice. (Civ. Code, § 827, subd. (b).) Our page on SB 1103 explains who qualifies.

A different rule applies when no periodic tenancy has formed. The California Supreme Court said long ago that a tenant who holds over after a fixed term, and does not agree to a higher rent the landlord announced, is not bound by the increase. That tenant owes the reasonable value of the use. (Colyear v. Tobriner (1936) 7 Cal.2d 735.)

Ending a holdover tenancy

Either party may end a month-to-month tenancy by giving at least 30 days' written notice. The notice may be served in the manner Code of Civil Procedure section 1162 prescribes, or sent by certified or registered mail. (Civ. Code, § 1946.) A qualified commercial tenant is entitled to 60 days from the owner, or 30 days if it has occupied the property for less than a year. (Civ. Code, § 1946.1, subds. (b), (c).)

If the tenant stays after a valid notice expires, the landlord's remedy is an unlawful detainer action. Our page on commercial evictions covers that process. Changing the locks is not an option, as our page on commercial lockouts explains.

If you are the tenant

A month-to-month tenancy can be ended on 30 days' notice. That is a fragile position for a business tied to its location.

• Look for an unexercised renewal option, and read our page on a missed renewal deadline if its date has passed.
• Ask for a written extension with a fixed end date and rent.
• Assume the old lease terms still bind you during the holdover.
• Keep proof of every rent payment the landlord accepted.

If you are the landlord

Decide what you want before depositing the next check. Accepting rent after the term supports the presumption of renewal, and with it the tenant's right to notice.

If you want possession, say so in writing and do not accept rent for the period after expiration. If you want the tenant to stay at a higher rent, serve a written notice of the change or sign an amendment. In an unlawful detainer action, the court assesses the damages caused by the holdover. Where malice is shown, it may add statutory damages of up to $600. (Code Civ. Proc., § 1174, subd. (b).)

What to bring to the first meeting

• The lease, every amendment, and any renewal or extension letters.
• A rent ledger showing each payment made and accepted after the term ended.
• Any notice of rent increase, termination, or default, with proof of delivery.
• Emails or texts about staying, leaving, or a new lease.

Frequently asked questions

Our lease expired three months ago and we kept paying rent. Are we month to month, and can the landlord double the rent?

Probably, and possibly. If the landlord accepted your rent after the term ended, California presumes a renewal on the same terms, month to month when rent is payable monthly. (Civ. Code, § 1945.) The landlord may then change the rent by written notice that takes effect in no less than 30 days, and Civil Code section 827 sets no ceiling. A holdover clause, or qualified small-tenant status, can change that answer.

What is a holdover tenant in a commercial lease?

A holdover tenant is one who stays in possession after the lease term ends. In California its status depends on the landlord's response. If the landlord accepts rent, the law presumes a renewed tenancy, usually month to month. If the landlord does not consent, the occupant is a tenant at sufferance. It owes the rent the lease sets for a holdover or the reasonable value of the space, and it can be removed by unlawful detainer.

Is 150 percent holdover rent enforceable in California?

In one published California decision, yes. A divided Court of Appeal held, on the facts before it, that a warehouse lease clause setting holdover rent at 150 percent of base rent was an agreed rent for continued use of the property, not a liquidated damages clause. (Constellation-F, LLC v. World Trading 23, Inc. (2020) 45 Cal.App.5th 22.) One justice dissented, so the argument that a steep holdover rate is a penalty has not disappeared.

The lease on our warehouse ended and the tenant will not leave. Do we have to give notice before filing an eviction?

Not always. In California a tenant who stays after a fixed term expires, without the landlord's permission, is guilty of unlawful detainer, and the statute states no notice requirement for that ground. (Code Civ. Proc., § 1161, subd. 1.) The answer may change if you accepted rent after expiration, because the law then presumes a renewed tenancy, which must be ended by written notice.

How much notice ends a month-to-month commercial tenancy in California?

At least 30 days' written notice from either party. (Civ. Code, § 1946.) The parties may agree, when the tenancy is created, to notice as short as seven days before a term ends. A qualified commercial tenant that has given its landlord the required notice of its status is entitled to 60 days from the owner, or 30 days if it has occupied the space for less than a year. (Civ. Code, § 1946.1.)

Talk to a California commercial tenancy attorney

If a tenant has stayed past its lease, or your landlord is changing the terms of a holdover, call (909) 235-6116 or contact us online. Kolmogorov Law, P.C. represents landlords and tenants of commercial property from its office in Irvine, California.

Related reading: our real estate litigation practice and the commercial lease disputes guide.

This page provides general information about California law and is not legal advice. Outcomes depend on the lease, the notices given, the facts, and the court.