Fixed Term or Periodic?

The reform of the RTA 1986 via the 2020 Amendment Act is now in play and there have been changes to how fixed term tenancies and periodic tenancies differ.
We want to outline the main differences so you can think about which type of tenancy best suits your personal situation.

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Fixed Terms

  • Landlords can give notice to not renew a fixed term and for the tenant to vacate using specified reasons.
  • These are the same reasons that are used to end a periodic tenancy.
  • The appropriate length of notice is given any time before the end date of the fixed term.
  • If a tenant requests to break a fixed term early and the landlord agrees, the tenant is responsible for the landlord costs associated with reletting the property and for paying rent until a replacement tenancy starts.
  • A landlord cannot end a fixed term early unless they can prove hardship or the tenant and landlord agree to end the tenancy early.
  • Fixed terms can offer more certainty of income and are a good choice for a long-term hold. If owner plans are a bit "up in the air" then a periodic is worth considering as well.
  • A tenant can choose to end a fixed term on the expiry date and vacate by giving at least 28 days' notice prior to the expiry date.
  • Landlords can apply to terminate a fixed term early where the tenant is breaching the tenancy agreement, in rent arrears, threatening, damaging beyond fair wear and tear etc
contract meeting
shaking hands

Periodics

  • Do not have an end date.
  • Landlords can give the correct amount of notice at any time using specified reasons
  • Tenants can give 28 days' notice at any time. This is usually plenty of time to secure a new tenant without affecting your occupancy/vacancy rate too much.
  • Periodics offer a bit more flexibility for both parties.

Landlord Notice Reasons 90 days

  • Property will be demolished
  • Sold unconditionally with vacant possession contract
  • Intention to Sell and wish to market vacant
  • Use Changes from residential to commercial
  • Renovations or refurbishment that are significant with material steps taken

Landlord Notice Reasons 63 days

  • Landlord or a family member will move into the property and use the property as primary residence for at least 90 days within 90 days of the tenancy ending
  • Property required for an employee or contractor of the landlord and that fact is written in the tenancy agreement

Landlords commit an unlawful act and risk a $6,500 fine for giving notice without grounds. If notice is given with proper grounds, and at a later date the landlords situation changes, the landlord is not committing an unlawful act.

If a tenant is breaching their tenancy agreement, the usual provisions for termination apply no matter whether fixed or periodic.

Other facts about Fixed Terms

  • There is no ability to use the new rent arrears provision when a tenant is 5 days late within a consecutive 90-day period. However eviction can still be sought when there are 21 days of arrears. Our arrears rate is extremely low so we don't consider this a major negative.
  • There is no provision to use the new anti-social behaviour rule to issue notices and apply for eviction where a tenant is issued 3 such notices in a consecutive 90-day period. However other provisions still apply
  • They can be renewed or extended. A renewal will trigger healthy homes compliance A renewal is when the agreement is renewed on the same terms and conditions for the same length of time as the original tenancy
Other facts about Fixed Terms