Whether you’re a landlord or a tenant, we think it is essential to have an understanding of periodic and fixed-term tenancy agreements, the two most common rental agreements here in New Zealand. That way when it comes to signing the dotted line all parties are crystal clear about what they’re committing to.
To start, let’s keep it simple.
Fixed-term means, the tenant will live in the house for a set period usually 6-12 months.
Periodic means, there is a set date when a tenant will move in but no set date when they will move out.
Ready to dive a little deeper?
Keep scrolling.
–
Fixed-term Tenancies
Everything you need to know.
A fixed-term tenancy agreement lasts for a set amount of time, for example, one year. There is no maximum length for a fixed-term tenancy but a landlord must include how long the tenancy will be for in the agreement – Got it?
The benefits:
- Security for both parties
- Less vacancy in the property
Something to remember:
A fixed-term tenancy cannot end early. However, the tenant may request to end a fixed-term before the set date but if the landlord agrees the tenant can be liable for any re-letting costs.
What happens when a fixed-term tenancy ends?
Generally speaking, a fixed-term tenancy will automatically convert to a periodic tenancy (an agreement with no end date). From here a tenant may have the opportunity to renew or extend the tenancy. Or the tenancy can end completely if the owner provides formal notice in accordance with the Residential Tenancies Act.
Next up…
Periodic Tenancies
Everything you need to know.
A periodic tenancy agreement has no end date. It continues until either the tenant or the landlord gives written notice to end it – Crystal clear?
The Benefits:
- Flexibility has to be the most popular benefit of a periodic tenancy. As neither party is locked into a fixed-term rental customers can give notice if their living situation changes and owners can give notice based on several reasons.
Something to remember:
Flexibility can be an advantage when it comes to tenancy agreements, but it can also cause problems for either party if they are given notice unexpectedly.
What happens when a periodic tenancy ends?
It doesn’t end! Unlike a fixed term, it continues until either the tenant or the landlord gives written notice.
————
So what tenancy agreement does Rentsmart recommend?
There’s no one-size-fits-all answer. However, we believe if an owner considers their property to be a long-term rental that a 12-month fixed-term agreement is best. Of course, some owner circumstances will change this.
Managing tenancy agreements can be tricky at the best of times, but as property managers, we are here to support both tenants and landlords on their rental journey.
So should you find yourself faced with any queries about periodic or fixed-term tenancy agreements, feel free to give us a bell.
Sam Murdoch (New Business Manager)