In today’s blog post I will be discussing periodic tenancies. We find that a lot of our landlords are confused by this topic and why we might allow a tenant to be on a periodic lease. In a nutshell, In NSW, a tenant does not have to agree to sign a new fixed term lease once their original term is finished. This means that their lease changes from a fixed term, to a periodic lease, which is a fancy way of saying that their tenancy becomes a week by week lease.
Tenants can continue for years and years on a periodic lease, and all the original lease conditions remain the same, just with an expired fixed portion of the lease. Our office has many tenants who are on this type of lease and there are varied reasons why a tenant might not want to be on a fixed term lease. Generally it is all about flexibility.
Now that we have clarified what a periodic lease is, I can inform you of what the changes are for you when your tenant is on a periodic lease.
The first thing that is different when a lease changes from a fixed term to a periodic, is that a tenant can give 21 days to vacate the property. On the flip side of this, if you as the landlord would like to give your tenant notice to vacate, for any reason other than a breach of their lease, this is called a ‘No Grounds Termination’ and you will need to give your tenant 90 days notice to vacate. The tenant is able to leave the property at any time during the 90 day notice period. Which means that they may see the entire 90 days out, or the tenant may vacate within 14 days of the notice. We keep in close communication with our tenants during this type of notice period, so that we can inform you of what is happening and what the tenants plans may be.
The only item that I would advise you to check if your tenant is going to go on a periodic lease, is your landlord insurance policy. We have heard of landlords whose policies have said that they will not cover a periodic lease. My answer to you on this is that you should review your policy if this is the case, as a periodic lease is a legal lease in NSW and if an insurer does not want to cover you for this style of lease, then your insurer is looking after themselves and not your best interests. There are many insurance policies available and we always recommend that you choose an insurer who writes their policies for the real estate industry.
If you would like to read my blog on having the wrong insurance in place, click this link http://www.tinacase.com.au/2017/07/10/uninhabitable/
