At the end of a fixed-term lease, the Landlord and their tenant have two options for how to proceed with the rental agreement. They can sign on for another fixed-term period or continue on a month-to-month basis or periodic lease.
If no new fixed-term agreement is signed and the tenant isn’t vacating the property, the lease will automatically move to a month-to-month basis. It’s important to understand the intricacies of both so that you can make the right decision.
A fixed term lease has a definite start date and a definite end date. Even if the property is sold, the tenant is allowed to reside there until the end of the lease. This type of agreement gives both Landlord and tenant security in terms of regular rental returns for the property owner and a stable home for the tenant.
Meanwhile, a period agreement is open and there is no end date written into the lease. This type allows for flexibility for both tenant and Landlord. Cases where it’s most popular is if a property is for sale or the tenant is seeking a short-term stay.
For both periodic and fixed term tenancies, notice periods still apply.
Whichever lease agreement you choose for your rental property all depends on your needs as well as the tenant’s. Speak to your Property Manager on what type is best suited to your situation.
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