There is no such thing in the Residential Tenancies Act (RTA) as a month-by-month tenancy, however, we are sometimes asked to give a tenant a months’ notice, so let’s clear this up.
The closest thing to a month-by-month tenancy is a short fixed-term tenancy. However, if a short fixed-term tenancy exceeds 90 days, it is then deemed to be a periodic tenancy, and it was still a ‘fixed-term’. Most of the time residential property managers deal with either periodic, or fixed-term tenancies.
It’s very important to know the differences between a periodic tenancy and a fixed-term tenancy for both landlords and tenants, so that both parties understand their commitments under the RTA and the right type of tenancy is selected.
Periodic tenancy
A periodic tenancy agreement has no end date. It continues until either the tenant or the landlord gives written notice to end it. Landlords must use one of the prescribed reasons in the RTA, and the notice period is either a minimum of 63 or 90 days’ notice. A tenant on a periodic tenancy only has to give 28 days’ notice.
Fixed-term tenancy
A fixed-term tenancy agreement is for a set period – e.g., 12month term. There is no maximum length for a fixed-term tenancy and the length of the term must be included on the tenancy agreement.
You can’t ‘give notice’ to end a fixed-term tenancy before the end date of the fixed term.
Once a fixed-term ends, the tenancy will automatically become periodic unless the landlord gives notice using one of the prescribed reasons in the RTA. They must give the tenant a minimum of 63 or 90 days’ notice, regardless of the end date for the fixed term. The only proviso is that the notice period must not end before the end of the fixed term, but it can go past the end date.
The tenant must give at least 28 days’ notice to end the tenancy prior to the end of the fixed-term, if they want the tenancy to end on that date, or the tenancy will become periodic. Once a tenant is within 28 days of the end of the fixed term, it is treated as a periodic tenancy, and they are only required to give 28 days’ notice to vacate.
Ending a fixed term tenancy early
Generally, a landlord or tenant cannot give notice to end a fixed-term tenancy early. However, there are limited exceptions to this rule, and some other options available if the landlord or tenant wants to end a tenancy early.
Landlords and tenants can agree to end the tenancy early
Fixed-term tenancies can only be changed if the landlord and tenants agree. Any agreement must be in writing and include what’s been agreed to. If a tenant breaks their fixed-term and the landlord has to find another tenant, the landlord may charge a fee for ending the fixed-term early. These fees should only be their actual and reasonable costs. For example, the cost to advertise for new tenants. A tenant may request to assign their tenancy, and the request that must be considered by the landlord.
Withdrawal from a tenancy following family violence – Important
A tenant who experiences family violence during a tenancy can remove themselves from the tenancy by giving the landlord at least 2 days’ written notice in the approved form (with qualifying evidence of family violence) without financial penalty or the need for agreement from the landlord. This applies to both fixed-term and periodic tenancy agreements. Victims of family violence do not need to apply to the Tenancy Tribunal to end their tenancy.
Sadly, property managers are receiving applications for removal from tenancies using this provision in the RTA. Disclosing notice of withdrawal or accompanying qualifying evidence of family violence is an unlawful act, which may result in a penalty paid to the tenant of up to $3000, or a complaint to the Office of the Privacy Commissioner. We are therefore unable to provide the reason for termination to the remaining occupants or tenants. We can however provide the reason for termination to the landlord, but we still need to be careful with what information we disclose, in order to protect the tenants right to privacy.
Termination by notice for physical assault by tenant
A landlord can give written notice of at least 14 days in the approved form to terminate a tenancy, if the tenant has physically assaulted the landlord, the owner, a member of the landlord or owner’s family, or the landlord’s agent, and the Police have filed a charge against the tenant in respect of the assault. Landlords will need to provide qualifying evidence of the charge being filed.
Landlords and Tenants can apply to the Tenancy Tribunal
Severe hardship – landlord or tenant
If a landlord or tenant has an unexpected change in circumstances, they can apply to the Tenancy Tribunal to end the tenancy, however this can be a high bar to achieve, particularly for a landlord.
If the applicant will suffer from severe hardship if the tenancy continues, the Tribunal may decide to end the fixed-term early at a date the Tribunal determines is appropriate. For this to occur, the hardship of the applicant (if the tenancy continues) would need to be greater than the other person’s (if the tenancy ends early). The landlord and tenant should discuss the change in circumstances first and try to reach an agreement.
The tenant can also apply to the Tribunal to end the fixed-term early if their rent has increased by a large amount. The Tribunal may do this if the increase is an amount that:
- the tenant couldn’t have expected when they signed the tenancy agreement, and
- will cause them serious hardship.
Changes to body corporate rules
If a rental premises is part of a body corporate and there is a change to body corporate rules that negatively affects the tenant, they can apply to the Tenancy Tribunal to end the fixed-term tenancy early.
The Tenancy Tribunal may order compensation
When the Tenancy Tribunal elects to end a fixed-term tenancy early, it may also order compensation to be paid. The person wanting the fixed-term to end may have to pay compensation to cover any costs incurred by the person who didn’t want the tenancy to end.
Together with the Harcourts Foundation, Holmwood is getting behind Gumboot Friday!
