When it comes to a renting out your home, one of the most important factors to consider is determining how long the Tenancy Agreement is going to be for. The most common Tenancy Agreement is a fixed term one, due to the security it can provide. Fixed terms can be of any length that is agreed upon by the property owner and the tenant. It’s usual to have lengths of 6 or 12 months. The current market and the high cost of moving means more people are leaning towards 12 month fixed leases. A residential tenancy agreement of 12 months provides a level of security for both the tenant and the property owner.
There are also periodic agreements. These have no set end date, and usually work on a week to week/fortnight to fortnight basis. Periodic agreements are for those who need a flexible agreement and can be useful in certain situations. Periodic agreements provide little to no security and are generally not as common as fixed agreements.
What tenancy agreement should you commit to?
We suggest the length of the new tenant’s first Tenancy Agreement should be for 12 months. This allows both parties to decide whether the arrangement is working out. It allows the property owner to see how the tenant meets their property care and financial obligations. If at the end of this agreement, both or one of the parties is unsatisfied, the proper steps can be taken to end it at the finish date.
When can I renegotiate the rent?
If the market permits, you can increase the rent and can write it into the Tenancy Agreement at the 6-month mark. The agreement can also be renegotiated before the end of each fixed term period. If you’re unsure about the process, there’s no need to be concerned. We will contact you about 3.5 months prior to a lease expiry with options that are available to you and provide you with rent advice.
Does the Tenancy Agreement end when the fixed period is over?
Once the fixed term period has finished, this does not necessarily mean the Tenancy Agreement itself finishes. The agreement itself will only be terminated if either the tenant or property owner gives the required notice. If the tenant wants to move out after the agreement ends, they must fill out the required paperwork. Tenants are generally required to give at least 14 days notice, to ensure everything goes smoothly and to allow the property owner to find new tenants. If neither party wants to discontinue the agreement, it will become a continuing and periodic agreement. A new tenancy agreement can also be signed with the same terms and conditions that were previously set.
What happens if the tenant wants to leave before the fixed agreement ends?
A fixed term agreement means that tenant will stay until at least the end date and are required to pay rent until that date. If the tenant wants to break the agreement early, compensation will need to be paid to the property owner. Likewise, if the property owner wishes to end the agreement early, they are required to compensate the tenant.
Renting your home can be confusing and stressful at the best of times. Sometimes important aspects such as the length of a Tenancy Agreement can get overlooked and the paperwork rushed through. If you’re unsure or having doubts about your Tenancy Agreement, don’t stress. Contact us and we will be happy to provide you with advice and answer any questions you might have involving your tenancy agreement.