Providing Total Rural & Residential Property Management Solutions

Rebecca Smith - 027 370 8045

Office: 027 313 2270

E: rebecca@ruraltenancy.co.nz

W: www.ruraltenancy.co.nz

1972 Telegraph Road, Darfield

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FIXED TERM VS PERIODIC TENANCY, WHICH ONE DO I CHOOSE?

ThemostcommonquestionIaskofLandlords andTenantsis“WhatTenancytermareyou lookingfor?PeriodicorFixedTerm?

In a nutshell - A Periodic Tenancy has no end date. The tenant can give notice to leave - the standard term is four weeks, and a landlord can give notice to end the tenancy if the house is required for themselves, family or staff (if written into the contract), to put the house on the market - or for major renovations. A Fixed Term Tenancy is documented for a set amount of time. Most commonly twelve months. This can be extended if both parties agree prior to the anniversary date - otherwise, the Agreement rolls on to a Periodic. Only if both parties agree can it be terminated early.

Contrary to some opinions - the end of a fixed term tenancy does not mean this is the date the tenancy ends - unless this was specifically noted in the Tenancy Agreement at the start. Another new law that came into effect in February 2021, relating to fixed terms, was that landlords must consider all requests from tenants to assign the tenancy and must not decline unreasonably. Landlords may include reasonable conditions when giving consent for assignment that the tenant must meet.

There is also a new provision in the Residential Tenancies Act (RTA) that allows for a landlord to apply to the Tenancy Tribunal for termination of a tenancy under the three strikes rule - if your rent is overdue and remains unpaid for at least five working days on three separate occasions within a 90-day period, and you are given notice on each occasion, the landlord has the right to apply to the Tenancy Tribunal to terminate the tenancy. This however only applies to Periodic Tenancies - not Fixed Term.

My personal opinion is preference to Periodic Tenancies - while Fixed Term Agreements may provide some level of certainty to both parties they don’t really allow for the unexpected changes life can throw at us, the important thing is however, - do your research and try and reach the agreement that best works for you.

Rebecca Smith.