Non-Fixed-Term vs. Fixed-Term Tenancies
5 min read.
When entering into a rental agreement, tenants and landlords must decide between two common types of leases: fixed-term and non-fixed-term tenancies. Each option offers distinct advantages and potential drawbacks depending on the circumstances. Understanding the differences between these two tenancy agreements is essential for both parties to make informed decisions.
What is a Fixed-Term Tenancy?
A fixed-term tenancy is a lease agreement set for a specific duration, such as six months, one year, or longer. During this period, the terms of the lease, including rent amount and property rules, remain constant. The tenant is obligated to stay for the entire term, and the landlord is bound by the terms until the lease ends.
Advantages of Fixed-Term Tenancies:
Fixed-term leases provide security for both the landlord and tenant. The tenant has guaranteed housing for the duration of the lease, while the landlord knows the property will be occupied and the rent will be consistent.
Typically, landlords cannot increase the rent during the fixed-term period unless specified in the lease agreement. This provides financial predictability for tenants.
Both parties are legally bound by the contract for the specified term, reducing the likelihood of disputes over lease terms, rent increases, or termination.
Disadvantages for Fixed-Term Tenancies:
Tenants who need to move before the lease ends may face penalties or be required to find a replacement tenant. For landlords, it can be difficult to change the lease terms or update rent until the end of the term.
Fixed-term tenancies require a longer commitment, which may not suit tenants with uncertain or short-term plans.
What is a Non-Fixed-Term Tenancy?
A non-fixed-term tenancy, often referred to as a month-to-month tenancy, does not have a predetermined end date. Instead, the agreement continues indefinitely until either the tenant or landlord provides proper notice to terminate. In most cases, the notice period is 30 days, but this may vary depending on local laws.
Advantages of a Non-Fixed-Term Tenancy:
For tenants, non-fixed-term leases offer the flexibility to move with minimal notice, which is ideal for those with unpredictable living arrangements or job situations. For landlords, it provides the ability to adjust lease terms or increase rent more frequently.
Both landlords and tenants can end the tenancy with proper notice, making the arrangement more adaptable to changing circumstances.
Disadvantages of Non-Fixed-Term Tenancies:
The flexibility of non-fixed-term tenancies means less security for both parties. Tenants may face rent increases more frequently, while landlords have less assurance that the property will be occupied long-term.
Landlords may experience higher tenant turnover, which can result in periods of vacancy or the need for more frequent tenant screening and property maintenance.
Understanding the difference between non-fixed-term and fixed-term tenancies is essential for both landlords and tenants while entering a rental agreement. Fixed-term leases provide stability and security, while non-fixed-term tenancies offer flexibility and adaptability. Both options come with their own set of advantages and challenges, so the choice ultimately depends on the specific needs and circumstances of the parties involved.
References
Fixed tenancy vs. periodic tenancy. SingleKey. (2023, April 20). https://www.singlekey.com/en/ownerkey/laws-regulation/fixed-tenancy-vs-periodic-tenancy/
Government of ontario | gouvernement de l’ontario. (n.d.-b). https://files.ontario.ca/mmah-guide-to-standard-lease-for-rental-housing-en-2022-04-19.pdf
LTB: Brochure: How a tenant can end their tenancy. LTB | Brochure: How a Tenant Can End Their Tenancy. (n.d.-a). https://tribunalsontario.ca/documents/ltb/Brochures/How%20a%20Tenant%20Can%20End%20Their%20Tenancy%20(EN).html#:~:text=You%20must%20provide%20the%20landlord,day%20of%20a%20rental%20period.
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