Periodic tenancy vs fixed term tenancy

[NomoneyNotalk]

Dear property experts.

What are the advantages and disadvantages on these 2 tenancies?

I started all my tenants with fixed term tenancies as i thought it is better than periodic tenancy and when period expires we leave it to become periodic. So far there seem to be not much difference between the two

Today a tenant asked me to renew his fixed term tenancy, so it gets me thinking which one is better? The tenant is very good and i want them to be long term in that house

Thank you

[PC]

Fixed term is a useful option in some circumstances.
Eg:
- Dunedin students - sign 'em up for 12 month even though they don't want the flat for the whole year.
- You want the house back to do x in the near future. Don't need to issue 90 day notice to get them out.
- Slow rental market and you're nervous about loss of income.

Most of the time there is no advantage to home providers.
If the tenant wants out - the kangaroo court will almost always let them.
And a tenant that is unhappy being there can cause a lot of damage.

[Maccachic]

Mine are always fixed term, gives a bit more security and worked in our advantage recently (was going to go periodic after reading so much about it on here) but was too late by the time I informed PM, tenant signed new agreement then a few weeks after wanted out they covered rent and costs till new tenant was found, this also happened another time in the past with a different tenant.

[NomoneyNotalk]

Hi,

Thank you for the replies.

I think my tenants are worried about rent increase since they requested the new fixed term, maybe?
So fixed term might benefit tenants in a hot market you think?

[Maccachic]

You can have rent increases in a fixed term if it is in your contract

[flyernzl]

Biggy is that the landlord cannot issue a 90 day notice during a fixed term tenency.

Basically, the tenant can always get out of a fixed term tenancy if they really want to, but a landlord cannot (unless the tenant breaches the terms of the tenancy).

It's all a bit too one sided for me.

[Perry]

FTTs Now Less Attractive

- You want the house back to do x in the near future.
Don't need to issue 90 day notice to get them out.

The rules have changed. I.e. FTT no longer means fixed term and
the LL must now give notice if the tenancy is to be discontinued.
(See 2 (b) below)

60A Fixed-term tenancy becomes periodic unless contrary notice given

(1) On the expiry of a fixed-term tenancy of more than 90 days,
the tenancy continues as a periodic tenancy with the same terms
as the terms contained in the expired tenancy so far as those terms
are consistent with a periodic tenancy.

(2) Subsection (1) does not apply if—

(a) the parties enter into a new tenancy agreement or agree to extend
the existing tenancy agreement; or

(b) within the effective period, either party gives the other written notice
of the party’s intention not to continue with the tenancy.

(3) The effective period is the period that starts on the 90th day before
the date on which the tenancy expires and ends with the 21st day before
that date.

And that's without considering what flyer has said: a tenant can far
more easily 'break' a FTT than can a LL.

[NomoneyNotalk]

Thank you for all the replies

[TomW]

Fixed term tenancies are good in student areas (sign them feb to feb). You get alot more higher rents and no vacancies

[Bluecoat]

When signing up new tenants, what is a norm these days - 4months trial and 12 months fixed.

If I have a clause that says to review rent after 4 months is that allowed?

Only because the PM made a mistake in the advert of advertised rent.

[Keys]

If I have a clause that says to review rent after 4 months is that allowed?

Think about your question and my answer for a periodic tenancy.

Yes.

[Bluecoat]

Think about your question and my answer for a periodic tenancy.

Yes.

OK It wasn't clear. What is the best way for trial as advertised and fixed with a new rent increase

[Keys]

7 (2a) MAMC