The changes to fixed-term tenancies came into effect on 11 February 2021 after the Residential Tenancies Amendment Act 2020 passed into law.
If you have a fixed-term tenancy ending soon, you may need to re-evaluate what type of tenancy agreement you might offer moving forward.
This blog looks at the key differences between periodic and fixed-term tenancies and what to consider when renewing a tenancy agreement.
What is a fixed-term tenancy?
A fixed-term tenancy is a tenancy agreement in place for a set period, e.g. one year. This arrangement isn’t flexible, so neither the tenant nor owner can give notice to end the tenancy before the fixed term has been completed. They are popular because they provide security for both parties – a set price for a set period.
All fixed-term tenancy agreements signed after 11 February 2021 will automatically roll into periodic tenancies at the expiry of their term unless agreed otherwise by both the tenant and owner or notice has been given in alignment with the Residential Tenancies Amendment Act 2020.
Any fixed term agreement signed before 11 February 2021 remains extendable under the old RTA.
What is a periodic tenancy?
Unlike a fixed-term tenancy, a periodic tenancy has no set end date and continues until either the owner or tenant gives written notice to end the tenancy.
Periodic tenancies are popular because there’s flexibility. Neither the tenant nor owner is locked into a fixed term, so either party can notice if their living situation changes.
From 11 February 2021, tenants can end a periodic tenancy agreement at any time, for any reason by giving at least 28 days’ notice. However, owners can only give notice for reasons specified in the Residential Tenancies Act. This flowchart explains the different reasons and the correct notice periods that apply.
There’s no one-size-fits-all, so if you have any questions about tenancy agreements and the new RTA changes, please contact your Property Manager or contact [email protected].
