Use & occupancy, defined

Use and occupancy (U&O) is the amount a person owes for living in an apartment when no valid lease is in effect. It compensates the owner for the actual use of the unit — for example, after a lease has expired, before a new lease is signed, or while a housing case works its way through court. U&O stands in for rent, but it is not the same thing legally.

The distinction matters because rent implies a landlord-tenant relationship under a lease, while use and occupancy is simply the reasonable value of occupying the space. Charging and accepting money as U&O — rather than as rent — helps an owner avoid accidentally creating or renewing a tenancy they intended to end.

When U&O comes up

Use and occupancy typically appears in a few common situations:

  • A lease expires and the occupant stays on month-to-month or without renewing.
  • A holdover proceeding is filed, and the occupant remains in the unit while the case is pending.
  • An occupant has no lease — such as a remaining family member, a subtenant, or someone who took over a unit informally.
  • A sale or transfer happens and the new owner inherits an occupant without a written agreement.

In each case, the owner is entitled to be paid for the occupancy, even though the traditional lease framework does not apply. The amount is usually pegged to the last agreed rent, but a court can set a different figure if it finds that number no longer reflects the reasonable value of the unit.

How U&O works in NYC

New York City is where this term does its heaviest lifting. In NYC Housing Court, a landlord bringing a holdover case can move for an order directing the occupant to pay use and occupancy during the litigation — often set at the last lease rent, or a court-determined reasonable value. That keeps the owner from housing someone for months at no cost while the case proceeds.

U&O is especially delicate in rent-stabilized buildings, where accepting the wrong kind of payment can imply a renewed stabilized tenancy or complicate a DHCR position. It also interacts with the owner's ongoing obligations: paying U&O does not relieve a landlord of the warranty of habitability, so heat, hot water, and repairs still must be provided.

Because a mislabeled payment can undo a case, many owners hold disputed funds in escrow or document every payment carefully — details our team manages as part of eviction and legal coordination.

Example

A tenant's lease ends, but they stay in a Bed-Stuy two-family without signing a renewal. The owner files a holdover and asks the court to order use and occupancy at the prior rent while the case is heard. The occupant keeps paying, the owner keeps providing heat and repairs, and the payments are documented as U&O — not rent — so the owner's right to regain possession stays intact.

Related terms

Handling U&O correctly is one of the many places where NYC housing law rewards local expertise. If you're navigating an expired lease or a holdover, talk to a principal at Yak Management or start with a property consultation.

This page is educational and not legal advice. For guidance on a specific situation, consult a qualified New York attorney.