Fixed-term versus periodic tenancies

What are the differences between fixed-term and periodic tenancies? And is one more advantageous than the other to either the landlord or the tenant?

Fixed-term and periodic explained

A fixed-term tenancy as the name suggests, is a tenancy for a prescribed period of time, typically 6 or 12 months. During the fixed-term tenancy, tenants cannot be given notice and they may not vacate the property (or if they do, they must continue to pay the rent until the end of the tenancy). This form of tenancy agreement gives certainty to both parties – the landlord knows that he or she has tenants for a fixed period of time, and the tenants know that they have a secure tenancy for that period of time.

A periodic tenancy on the other hand, is ongoing and will continue until such time as one or other party gives notice to end the tenancy.

Notice for fixed-term tenancies

Although the tenants know when their fixed-term tenancy will end under a fixed-term tenancy, the landlord must notify them not more than 90 and not less than 21 days before the end of the fixed-term period that their tenancy is coming to an end. Both parties may renegotiate another fixed-term tenancy or, if either party does not want to continue with the tenancy, this must be advised between 90-21 days before the end of the tenancy.

If the tenants are not advised within the 90-21 day time period before the end of the tenancy, the tenancy will automatically ‘roll over’ into a periodic tenancy agreement with the associated notice conditions of a periodic tenancy.

Notice for periodic tenancies

Under a periodic tenancy, the landlord must give tenants a minimum of 90 days’ notice. The only exceptions to this are if the property has been sold or the landlord wishes to use it for themselves or for a family member, in which case the minimum notice that must be given is 42 days.

Tenants on the other hand, are only required to give a minimum of 21 days’ notice.

Advantages and disadvantages

Both types of tenancies have advantages and disadvantages:

• for fixed-term tenancies, both landlord and tenant have security of tenants and tenancy for the duration of the agreement. The disadvantage of this security is that termination of the tenancy before the end of the fixed term period can only be achieved if both parties agree to the termination.
• periodic tenancies allow much more flexibility, particularly to the tenants who only need to give 3 weeks’ notice if they wish to leave, but also to the landlord if they wish to take back the property for any reason.
  
  

Deciding on the type of tenancy for you

Deciding which type of tenancy suits you best either as a landlord or a tenant is dependent on whether you prefer greater security or greater flexibility. Both types of tenancies work well as long as each party understands their own requirements and also understands the conditions imposed by each type of tenancy.