The following information was correct at the time of writing; however it’s an ever-evolving industry so we do recommend doing your own research.

Are you confused about the differences of periodic tenancy vs fixed term? You’re not the only one. The differences between a fixed term and a periodic tenancy are many, and they often cause questions both with landlords and tenants. In this article, we will explain how exactly these types of tenancies are different. Read on for answers to the most common questions related to the topic. Specifically, we will answer:

• What are the tenancy trends in Auckland’s real-estate market?
• What does periodic tenancy mean for landlords and tenants?
• What does fixed term tenancy mean for landlords and tenants?
• How can you ensure you choose the right type of tenancy for you?

Whichever type of tenancy you choose, watch this helpful video to make sure that you act in compliance with the law:

Fixed vs periodic tenancy: statistics

New Zealand’s and, in particular, Auckland’s real estate landscape has changed considerably over the past decade. Some statistics that are evidence of this, focusing on the proportion of periodic tenancy vs fixed term, are the following:

• Even though fixed term vs periodic tenancy has been traditionally less popular with renters, this is changing. Ten years ago, fixed term tenancies accounted for only 35% of tenancies in Auckland, increasing to 51% five years ago.
• Data shows that tenancy duration remains more or less steady, with the average tenancy duration in Auckland decreasing only slightly – something that could be explained by the fact that a high proportion of inner-city renters are students who are planning to move in the future based on job opportunities.
• The central suburbs of Auckland have the longest average tenancies, while suburbs with average tenancies of over three years include Balmoral, Lynfield, St Johns, Paerata, Mangere Bridge, Devonport and Green Bay.

 

Fixed term tenancy vs periodic tenancy: understanding the difference

It is very important for both landlords and tenants to know about the differences between a periodic tenancy and a fixed-term tenancy for many reasons. These include:

• The type of tenancy you have will affect what your rights and obligations are as a tenant or landlord. For example, if you want to terminate a tenancy, you will find that the conditions are very different for periodic and fixed-term tenancies.
• Knowing the differences between a periodic tenancy and a fixed-term tenancy allows you to choose the one that suits you best. For example, if you intend on staying in one location for a long time, you may want to discuss the ideal length of tenancy for you with your landlord as there is no maximum.
• Being aware of the differences between what is a periodic tenancy and what is a fixed-term one will also allow you to budget properly. Knowing exactly how much you will be spending as a tenant or earning as a landlord can help ensure your financial security. As a landlord, you will need to be especially aware of the different rules for increasing rent during periodic and fixed-term tenancies.

Periodic tenancy

What is a periodic tenancy?

A periodic tenancy definition would be a rental agreement with no end date. This means that it continues until written notice is given to end it by either the tenant or the landlord. In other words, a tenancy with no fixed duration is a periodic tenancy.

Is a periodic tenancy good? Who is it suitable for?

Periodic tenancies are great for people with regularly changing life circumstances, as they offer flexibility. If you don’t have a family and are thinking of relocating based on job prospects but want to keep a window of possibility open, a periodic tenancy is most likely suitable for you.

Is there any special periodic tenancy law in New Zealand?

The main official document regulating all periodic tenancy related issues is the Residential Tenancies Act.

The laws that define periodic tenancy in New Zealand are often updated. You can stay up-to-date with periodic tenancy laws by visiting this website.

What is a statutory periodic tenancy?

A statutory periodic tenancy occurs when a fixed term tenancy ends and the tenant continues to stay at the property on a rolling, periodic basis without renewing their contract.

What is a year-to-year periodic tenancy (yearly periodic tenancy)?

Periodic tenancies must have a certain maximum duration, which is often a year. A yearly periodic tenancy is a tenancy that rolls from one year to the next.

What is a periodic tenancy agreement?

A periodic tenancy agreement is a written contract between a landlord and a tenant that sets out everything that a landlord and a tenant have agreed to about the tenancy.

 

Where can I find a periodic tenancy agreement template free?

For free periodic tenancy agreement templates, head to the Tenancy Services website.

How long is the notice period for a periodic tenancy?

Tenants must give landlords 28 days’ written notice in order to end a periodic tenancy. The length of time for giving notice to tenants as a landlord depends on their reasons for ending the tenancy.

Where can I find a periodic tenancy notice template?

You can find a free periodic tenancy termination notice template online on the Tenancy Services website.

The link also contains a periodic tenancy notice by tenant form.

When is terminating a periodic tenancy possible?

Terminating a periodic tenancy is possible at any time after the tenancy agreement has been signed by both the tenant and the landlord.

Where can I download a sample periodic tenancy rent increase notice?

If you are a landlord who wants to increase periodic tenancy rent, you must inform your tenants in writing in advance. You can download a sample rent increase notice, as well as any periodic tenancy notice NZ, here.

Where can I download a sample periodic tenancy eviction notice?

If you find yourself in the unfortunate position of having to evict your tenants for some reason, you will have to inform them in writing as well.

You can download a sample eviction notice for free.

 

Fixed-term tenancy

What is a fixed term tenancy?

To define fixed term tenancy, one would say it is a rental agreement that lasts for a set amount of time, from a few months to a year or more.

Is a fixed term tenancy good? Who is it suitable for?

A fixed-term tenancy is great for individuals seeking long-term security. Fixed-term tenancies can be suitable for families who are set on a location for a long time due to work and education commitments. Many landlords also have a preference for fixed-term tenancies, as they provide a guaranteed long-term income.

What is a fixed term tenancy notice?

A fixed-term tenancy notice is a written notice given once the term ends in order for the tenancy to not become periodic automatically.

How long is the fixed term tenancy notice period?

Tenants need to give their landlord notice in writing at least 21 days before the term ends.

Is ending fixed term tenancy early possible?

You cannot end fixed-term tenancies early by simply handing in a notice. Fixed-term tenancies can only be changed if a landlord and all their tenants agree.

 

Is getting out of a fixed term tenancy agreement legal?

If the landlord and all tenants discuss and agree on early termination of a fixed-term tenancy, then this is legal. This agreement should be in writing and tenants should keep in mind that the landlord may charge a fee for ending the fixed term early.

Where can I find a fixed term tenancy agreement template?

To find a fixed term residential tenancy agreement template online, head here.

Where can I download a sample fixed term tenancy rent increase notice?

If you want to increase rent as a landlord, you will need to inform your tenants in advance by giving them a written notice. You can download a sample fixed term tenancy form notice online.

Is a 5-year fixed term tenancy possible?

As there is no fixed term tenancy NZ maximum length, a 5-year tenancy is possible.

What is short fixed-term tenancy?

Just like the fixed term tenancy definition, short fixed-term tenancy is also clear in its meaning. A short fixed-term tenancy is a tenancy the fixed-term of which is 90 days or less. Unlike a regular fixed-term tenancy, it does not automatically become periodic when the term ends.

Boarding houses

What is a boarding house?

A boarding house is a residence intended to be occupied by at least six tenants who rent a single room and share the rest of the facilities, like the kitchen and bathroom. Boarding houses must comply with local council requirements, as well as healthy homes standards.

What is a boarding house tenancy?

A boarding house tenancy involves all tenants signing their individual tenancy agreement with the landlord. Boarding house tenancy agreements normally last 28 days or more and there are specific rules and regulations that must be followed by tenants and landlords.

Service tenancy

What is a service tenancy?

A service tenancy is a tenancy where accommodation is provided for workers by their employer for the duration of their employment contract.

Most of the standard rules that apply to regular tenancies apply to service tenancies as well, save for a few differences, like for instance that rent can be deducted from a tenant’s wages upon agreement.

 

Make your choice!

Different tenancies mean different rules, rights, and responsibilities for both landlords and tenants. This is why it is important to know what is a fixed term tenancy, and what is a periodic one, and what kind of tenancy suits your individual needs before signing a tenancy agreement.

If you are a landlord looking for steady long-term income, you might benefit from a fixed-term tenancy. On the other hand, if you are looking to rent an apartment for only a couple of months before moving, you’re probably better off with a short term fixed tenancy agreement. Whichever you choose, you will need to be well-informed about the rules for terminating your contract, rent increases, evictions, and everything else that comes with renting so that you know exactly what you’re getting into.

This is where CGPM comes in. For all your questions on different types of tenancies, rights and responsibilities as a landlord and tenant and more, contact CGPM. Our Auckland property management professionals will be able to guide you through the process of renting in Auckland.