Periodic or fixed term-tenancy?

Whether you’re a landlord or a tenant, it’s important to know the differences between a periodic tenancy and a fixed-term tenancy so you can choose the one that suits you best.

Tenancy Agreement
  • 1 August, 2018
  • Tenants, Landlords, Tenancy Term

Periodic tenancies

A periodic tenancy is one that continues until either the tenant or the landlord gives written notice to end it.

Fixed-term tenancies

A fixed-term tenancy only lasts for a set amount of time – for example, one year. The amount of time must be written on the tenancy agreement. If the fixed-term is for longer than 90 days, the tenancy automatically becomes a periodic tenancy when the fixed term expires (unless the landlord or the tenant gives notice to say they don’t want the tenancy to continue or they agree on something else).

The landlord or tenant can’t give notice to end a fixed-term tenancy early, so they both need to be very sure they want a fixed-term before they sign the tenancy agreement.

Tenants should also think carefully about who they choose to live with when signing a fixed-term tenancy agreement with other tenants. If they fall out with one of the other tenants, they may not be able to get out of the tenancy.

Short fixed-term tenancies

A fixed-term tenancy of 90 days or less is considered a short fixed-term tenancy. If the landlord and tenant agree in writing that the short fixed-term tenancy won’t extend beyond 90 days, the rules relating to market rent, increasing the rent after improvements to the premises, and giving notice to end the tenancy will not apply.

However, if the tenancy is then extended beyond 90 days, all these rules will apply. Either party will then be allowed to give notice to end the tenancy as if it were a periodic tenancy.

Landlords are not allowed to use a short fixed-term tenancy as a trial period.

LJ Hooker NZ

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