Fixed-term tenancies automatically become periodic tenancies unless otherwise notified

As the name suggests, a fixed-term tenancy is for a set amount of time, typically 12 months. A fixed-term tenancy automatically becomes a periodic tenancy at the end of the fixed-term period unless either the landlord or the tenant notifies the other party in writing that they do not want the tenancy to continue. The notice of intent to end the tenancy must be given by one party or the other between 90-21 days before the end of the fixed-term tenancy.

Alternatively, the fixed-term tenancy may be extended if both landlord and tenant agree to the extension but neither party is obliged to renew or extend it. An extension or renewal to a fixed-term tenancy must be done in writing.

Fixed-term tenancies cannot end early

Neither landlord nor tenant can terminate a fixed-term tenancy early unless both parties (and all tenants in the rental property) agree. Where both parties agree, this must be in writing and describe what has been agreed upon. If a tenant breaks the lease, a landlord can require that tenants continue to pay rent until new tenants take over the rental payments, or until the end of the tenancy. They may also charge reasonable costs (typically advertising costs to find new tenants) for ending a fixed-term tenancy early.

Advising tenants that their fixed-term tenancy will end

At Nightingales, we advise the tenant in writing that the tenancy is coming to an end. We do this between 90-21 days before the end of the tenancy.

Depending on the circumstances, we offer options of either extending the fixed-term tenancy, changing to a periodic, or terminating the tenancy. When we send the notification, tenants must reply that they agree to the options of an extension to the fixed-term or a change to a periodic. If we do not hear from them, we assume that the tenancy will be terminated at the end of the fixed-term period.

Proposed changes

Under the proposed changes to the Residential Tenancies Act 1986, a fixed-term tenancy will automatically become a periodic unless both parties agree to terminate the tenancy (instead of only one or other party wishing to end the tenancy as is the current situation). It is difficult to understand what is intended by this change but it seems that as both parties must agree on the tenancy ending, the law will be weighted more heavily on the tenants side because if the tenants choose not to leave while the landlord wishes to end the tenancy, the landlord will be powerless to evict them except on the limited grounds.