What Is a Periodic Tenancy and Its Pros and Cons?
When you rent, you rent for a fixed term. When that fixed term is up, you move out. Sounds simple, yes? But what if you like the property? What if the landlord likes you? What if you are too sick to move, or you are in a lockdown Covid situation and you simply can not move out? There are often situations that can’t be planned for that require a continuation of the rental agreement.
Sometimes life happens, and stops you from being able to move out when the terms of the agreement ends, so you have 2 options. Extend for another 12 month term, or ask if the landlord will consider a periodic tenancy agreement. You might not want to be tied in to another 12 months, so the other option adds flexibility for you.
A periodic tenancy also known as a rolling tenancy or month-to-month lease is a leasing arrangement that has no expiration date and lasts until one side provides notice, or requests to leave. This must be in writing and include the expiration date of the agreement. It is like when you resign from a job, you give your notice, you work your notice, and then you leave under good terms.
As with all contractual issues, it is good to know what it all means and how it affects you:
According to the lease schedule, if the renter started paying monthly or quarterly rent in the signed arrangement, there will be a month-to-month or quarter-to-quarter length of time for the tenant to reside. The date on which the previous tenancy was terminated is used to calculate the beginning date of the current term. Rent is then due monthly, from that date. Landlords should be aware that just altering the day the rent is due will not affect the period of the lease.
Pros of periodic tenancy:
A periodic tenancy may be beneficial if the landlord or the renter are unclear about your future intentions, such as if you want to renovate or sell your house, for instance. Also, landlords who are worried about a tenant’s behaviour will also find it useful. A periodic tenancy permits renters to continue on a periodic term only if the landlord believes they are behaving properly.
Cons of periodic tenancy:
The biggest drawback for landlords having occupants on periodic leases is that the renter may pack and then go pretty fast; the landlord has no longer-term certainty of revenue. Additionally, the landlord has the right to terminate the contract at any time so if you are a renter on a monthly rolling lease, you may find yourself with just two months to locate another place to reside.
They are bad for organising finances, but good for flexibility and trust.
They are common for landlords who already own the property outright, with no bills to pay on the property, the income is not necessarily needed, so it might be OK if the property is empty for a month or 2 between tenants.
