Rental Agreements in TAS: The Pros and Cons of Fixed vs No-fixed Term
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Baxton.me
6 January 2018

Rental Agreements in TAS: The Pros and Cons of Fixed vs No-fixed Term

So you’ve realised your long-cherished dream of owning rental property to boost your monthly cash flow. Now you’re faced with finding tenants and entering into a rental agreement with them. There are two types of tenancy agreement in Tasmania: fixed term, with a stipulated expiry date, and no fixed term, which does not have a pre-determined end date. Each carries different terms and conditions. Baxton Property Management in Hobart, provides a basic outline of how the two agreements work.

Fixed Term Agreement

Fixed term agreements, which must be for periods of at least 4 weeks, are exactly that – fixed until a set date. And if the landlord wants to change that date, it involves going through a series of processes.

If all goes well during the tenancy, it’s highly likely that both tenant and landlord are going to want to extend the agreement. The tenant is quite obviously satisfied with the premises, and the landlord is happy to have a good tenant and would like to prolong the agreement to avoid the costs and time involved in finding a new tenant. Extended it for a further fixed term merely involves both owner and tenant signing a new agreement.

When the Going gets Tough

If the landlord/tenant relationship is not working out well, it’s rather more complicated, particularly in Tasmania, where tenancy agreements cannot be terminated without a valid reason. The owner can only get the tenant to move out earlier if the tenant breaks the terms of the agreement, or a lending institution has foreclosed on the property.  However, selling the property does not justify early termination.

Tenants don’t have to give notice that they don’t want to extend or renew the agreement. However, if an owner doesn’t want to renew it, or the tenant doesn’t want to negotiate an extension, the owner must issue a notice to vacate and “deliver vacant possession of the property” on the term’s expiry date. And there is a time constraint on the notice. It must be issued within the last 60 days of the end of the agreement, and provide at least 42 days’ notice. If this notice is not issued, the tenant can continue to stay on, and provided they continue to pay rent, the lease automatically converts to one with no fixed term.

If a tenant wants to leave early, they must notify the owner in writing as soon as possible, to give them the opportunity to re-let the property. It’s in their best interests to do so, because tenants are liable for the rent until the property is re-let, or the end of the agreement, whichever comes first.

Agreement with No Fixed Term

Agreements with no fixed term are normally on a month-to-month basis, but could even be as short as fortnight-to-fortnight. It can be terminated at any time if both owner and tenant agree to end it. In other instances, the tenant or owner must give the other 14 days’ notice. The only exceptions are if the owner wishes to sell or transfer the property, or wants to do major renovations. In this case 42 days’ notice must be given, and 60 days’ notice must be given if the owner’s lending institution forecloses.

Dealing with the more subtle differences between the two types of agreement can prove to be one of the many stressors faced by property owners who chose to go it alone as DIY property managers. A professional property management company like Baxton Property Management in Hobart, can take care of all the hassles that go with rental properties. For more info contact us at Baxton website.


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The information contained in this article is based on the authors opinion only and is of a general nature which is not indicative of future results or events and does not consider your personal situation or particular needs. Professional advice should always be sought relevant to your circumstances.

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