Periodic Rental Agreement NZ: Everything You Need to Know
A periodic rental agreement is an agreement between a landlord and tenant that allows for the rental of a property for an indefinite period of time. This type of rental agreement can be used for both residential and commercial properties, as long as both parties agree to the terms and conditions.
In New Zealand, a periodic rental agreement is governed by the Residential Tenancies Act 1986. The act sets out the minimum requirements for rental agreements and provides protection to both landlords and tenants.
What is a Periodic Rental Agreement?
A periodic rental agreement is an agreement that allows for the rental of a property for an indefinite period of time. This type of agreement is often used when the landlord and tenant are unsure of the length of the tenancy.
Periodic rental agreements can be used for both residential and commercial properties. They are a great option for tenants who are looking for flexibility in their tenancy, as they can terminate the tenancy with only a few weeks’ notice.
When a periodic rental agreement is entered into, the tenancy will continue until either the landlord or tenant terminates it. The agreement can be terminated by giving notice in writing. The notice period is usually set out in the rental agreement and varies depending on the length of the tenancy.
Advantages of a Periodic Rental Agreement
There are several advantages to a periodic rental agreement, including:
Flexibility: A periodic rental agreement provides flexibility for both landlords and tenants. Tenants can terminate the tenancy with only a few weeks’ notice, while landlords can increase the rent or terminate the tenancy with proper notice.
Reduced Costs: A periodic rental agreement can be cheaper than a fixed-term tenancy. There are no fees associated with renewing the tenancy, nor are there any penalties for early termination.
Less Responsibility: With a periodic rental agreement, the landlord has less responsibility than with a fixed-term tenancy. The landlord does not have to worry about renewing the tenancy or finding new tenants when the tenancy ends.
Disadvantages of a Periodic Rental Agreement
There are also several disadvantages to a periodic rental agreement, including:
Rent Increases: Landlords can increase the rent with proper notice, which may make it difficult for tenants to budget for their living expenses.
Uncertainty: With a periodic rental agreement, there is always uncertainty about how long the tenancy will last. This uncertainty can make it difficult for tenants to plan for the future.
Lack of Security: A periodic rental agreement does not provide the same level of security as a fixed-term tenancy. Landlords can terminate the tenancy with proper notice, leaving tenants without a home.
Conclusion
A periodic rental agreement is a flexible and cost-effective way for landlords and tenants to rent a property. It provides flexibility for both parties and can be terminated with only a few weeks’ notice. However, there are also disadvantages to this type of agreement, including rent increases, uncertainty, and lack of security.
Before entering into a periodic rental agreement, both landlords and tenants should carefully consider the advantages and disadvantages and ensure that they are comfortable with the terms and conditions of the agreement.