Before signing up a tenant, you will need to decide whether to offer a periodic or fixed-term tenancy.
What Is A Periodic Tenancy?
A periodic tenancy has a start date, but no end date. This means it can last for an indefinite period of time.
Terminating A Periodic Tenancy
A periodic tenancy can be terminated when:
- The owner gives a minimum of 60 days notice in writing; or
- The tenant gives a minimum of 21 days notice in writing.
Advantages Of Periodic Tenancy
A periodic tenancy offers greater flexibility than a fixed-term agreement. If circumstances change it is easy to terminate the agreement. For example, if you decide to sell the property or move back in.
Disadvantages Of Periodic Tenancy
It is just as easy for the tenant to terminate the agreement. Searching for new tenants makes your rental income less assured.
What Is A Fixed Term Tenancy?
A fixed term tenancy has a start and an end date. The end date indicates the minimum length of time the tenant agrees to stay at the property.
What Happens When A Fixed Term Tenancy Expires?
When a fixed term tenancy agreement expires, a landlord can:
- Sign another fixed term tenancy agreement with the tenant.
- Choose not to renew the agreement and ask the tenant to leave by giving them 30 days notice to vacate on or after the expiry date.
If a landlord does not renew the agreement and does not ask the tenant to leave, the fixed term agreement automatically becomes a periodic tenancy agreement.
How Long Is A Fixed Term Tenancy?
A fixed term tenancy agreement usually lasts for 6 or 12 months. However, any period of time can be chosen.
Advantages Of Fixed Term Tenancy
Rental income is more secure.
Disadvantages Of Fixed Term Tenancy
The landlord has less flexibility around ending the agreement.
For example, if circumstances change suddenly, the landlord cannot simply terminate the agreement before it expires.