It’s crucial to understand the distinctions between a periodic tenancy and a fixed-term tenancy. Landlords give free rental agreements to their tenants for signing. Whether you are a landlord or a tenant, you can choose the best option that suits you.
What is a Fixed-Term Tenancy?
A fixed-term tenancy is a tenancy arrangement that lasts for a specific amount of time, usually a year. Because this agreement is rigid, neither the rental customer nor the property owner can give the notice to cancel the lease before the stipulated term expires.
The Advantages of a Fixed-term Lease
Both Parties’ Safety is Guaranteed
Fixed-term leases are popular because they give both parties security. Customers who rent a property have an assured home at a certain fee for a set amount of time.
Property owners may also benefit from having a predetermined time frame if they wish to sell the property at a specific time of the year or execute property maintenance that necessitates the house being vacant, such as carpet replacement. The renter is responsible for the costs of breaking a fixed-term lease.
Unless both parties agree differently, a fixed-term tenancy cannot be canceled early. As a result, it’s vital that both the rental client and the property owner are satisfied with the terms of the agreement prior to signing it. All parties should think about the following points before signing:
- The current state of the property
- The fixed term’s length and whether it is suitable for both parties
- Whether the owner of the property intends to sell it at the end of the fixed term
- Is the property up to code?
- Has the property been evaluated for Healthy Homes requirements?
The Advantages of a Periodic Tenancy
There is no end date for a periodic tenancy. This means it will continue until one of the parties gives notice under the Residential Tenancies Act.
Flexibility is one of the most common advantages. Because neither side is bound by a contract, renters can give notice if the property does not fit them or their living condition changes. Property owners can also provide notice if:
- They want to sell the house and would prefer to sell it vacant and staged.
- They sell their house, and the new buyer does not want rental clients.
- The property is required for staff housing; if this is a possibility, it must be specified in the tenancy agreement.
There is no need to complete additional documentation every year to renew a periodic leasing agreement once it has begun.
Terminating a Tenancy Arrangement
A periodic tenancy can be ended at any time and for any cause by giving at least 21 days written notice.
Owners of Real Estate
It’s a little different for property owners. The Tenancy Tribunal may be required to order the termination in specific cases. The following are examples of these scenarios:
- If the rental client has performed three antisocial acts in the last 90 days and has received detailed notifications for each act.
- If the rental client has received three reminders in the last 90 days for paying rent five or more working days late on three different instances.
The property owner may also terminate a periodic tenancy for the following reasons:
- If a member of the property owner’s family needs to live there
- If the house is going to be used by the owner’s employees