Fixed term agreements give a number of benefits to landlords, which is why the property management team at Harcourts Kiama encourages you to offer your tenants the opportunity to sign a new fixed term agreement when their tenancy is about to run out. It provides a level of protection to both the tenant and the landlord.
Benefits of fixed term agreements:
- Security and peace of mind that you have a fixed income for the period of the agreement.
- Enables forecasting and budgeting for any expenses or refurbishments needed in the property.
- Rent increases can be written into tenancy agreements.
- If re-possession of the property is required you only need to give a termination notice of 30 days prior to the end date of the agreement, whereas 90 days’ notice is required after the lease has expired.
- A tenant cannot leave prior to the end of the fixed term tenancy agreement without incurring penalties.
You can, of course, choose to let the initial fixed term lease run out in which case it shifts to a periodic agreement, which is a rolling month-to-month tenancy with no fixed end date. However there are some disadvantages to periodic agreements:
- The tenant is in control and can dictate when they wish to end the tenancy.
- The landlord needs to give 90 days’ notice to the tenant if they require vacant possession. And the tenant can leave any time after receiving the termination notice and only pay up to the day they hand in the keys or vacate the property.
If you would like to discuss your tenancy agreement or start negotiations with your tenant, please feel free to call your friendly Harcourts Property Manager.
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