Periodic tenancy vs fixed term contract – which is best for tenants?

by Chris Lang on July 27, 2009

Parking for tenants onlyWhen you sign a rental contract, usually it will be for a fixed term tenancy. Fixed term means that there is a period of time where you can’t move out without breaking the lease and paying the costs associated with it. In most cases people sign such contract for a year.

Imagine that your 12 months are about to end, you’re still living in that house, unit or apartment with no intention to move out, and the estate agent calls and says: “Your contract is approaching it’s termination date, why don’t you come by the office and sign a new one”. And you know what – there is one thing he forgets to mention.

You don’t have to sign a new contract. You can stay right there, continue paying your rent and not sing anything, and still be a lawful tenant because there is a thing called “periodic tenancy”.

Periodic tenancy means you are renting on month-to-month basis. In your original contract one of the clauses is about tenancy of this nature and if there is no fixed term contract signed when the original contract expired, that’s what happens. You become a periodic tenant and it’s like your contract renews itself every month.

Of course there are pros and cons to both fixed and periodic tenancy contracts.

Fixed term contract – reasons for and against

For: When you’re on fixed contract, the landlord can’t decide he wants to raise the rent next month – he has to give you a notice of 3 months and you have more time to disagree and fight that raise, if you believe it is unreasonable.

For: Should your landlord decide he wants you out, they must give you a 3 months’ notice, which is plenty of time to go and find another place to live.

Against: On the downside, if you decide to move out in the middle of your second year of renting, that would be breaking the lease and heavy costs are often characteristic for such cases.

Periodic tenancy contract – reasons for and against

For: If you were on month-to-month basis and want to move out, a simple notice of one month should be enough for you to not owe your landlord anything.

Against: If your landlord sells the house you live in and wants you out, he/she too is not required to give you more than 60 days’ notice. It can be stressful for a person to suddenly find out that they need to look for another house, find one and move in two months.

I guess this comes down to your plans and choosing the kind of rental contract depends on whether you need the freedom to move out whenever you like.

{ 14 comments… read them below or add one }

Wendy Ceccolini May 19, 2012 at 6:49 am

I’m renting a home and my year lease is up at the end of June. My landlord sent me a letter to the effect of renewing a lease agreement for 6 months or 1 yr. which I don’t wish to do either. She said that if I didn’t wish to continue with either lease agreements they will begin advertising on this property for rent June 1st. Do I have to sign another lease or can I tell her I would like to go on a monthly basis?I look forward to your reply so I can make an informed decision.


Chris May 21, 2012 at 5:52 pm

Hi Wendy, you don’t have to sign the lease they want you to sign, you can tell them you’d like to stay on month by month basis. Even better, write to them, make it official. It doesn’t make sense to me that a landlord who already has a tenant will start throwing money on advertising, to get another tenant. They could be just playing games trying to make you believe you have to give in and sign a 6 or 12 month lease.


Margaret May 29, 2012 at 10:35 am

Morning I am wondering if you can assist me. In march 2011 we moved into a house and was paying $750 a week no bond or weeks in advance. My obligation was to pay $3,000.00 per month to remain at the house whicj I did on the 15 of every month. In November 5 2011 we moved out of the house. On the 23 October I paid $3,0000.00 in rent which was from 15 Oct to 15 Nov 2011. We again moved on the 5 Nov 2011. I have now after some months of moving from the house have been asked to find another $1,570 in rent as the lady I was paying the money too each month as agreed has all of sudden been told by her account that 2 months had 5 weeks in the month and I should be paying the difference. As we had no Tenancy Agreement signed or Periodic Lease papers am I obliged o pay the money to her. I was told this in March 2012 4 months after we had moved out of the house. On top of that we had completely cleaned the house and left it in better condition than when we moved into it. The lady I was paying the money too thanked us for ensuring the house was spotless. Can you please give me some direction on this and am I liable to pay the money to her. I feel as we moved out on the 5 Nov and on the 23 Oct I payed for the month the lady received 2 weeks payments when we were not in he house. I await your reply. Thank tyou


Chris May 29, 2012 at 11:30 am

Hi Margaret,
If your agreement was $750 per week, then to calculate the rent per month you do

weekly rent X 52 (weeks in a year) = annual rent / 12 = monthly rent.

In your case it works out 750 x 52 / 12 = $3250 a month.
So if you were paying $3000 a month you still owe the landlord $250 for each month you’ve rented the house.
Sorry for the bad news – I know this is not what you were hoping to hear.



Kyra May 29, 2012 at 8:16 pm

After 6 weeks of renting a granny flat my friend wanted to move out we where both on the lease when she was replaced by a new tenent the new tenent got a seperate lease and were told that we would both have our own as this is better.
I never got a new copy of my lease
2 weeks before our lease is up they said they wanted to charge extra for elec which was previously incl an Etta $50 a week for 2 ppl and and extra $90 for three people equaling 175 ea for 2 and 130ea for 3.
I tried to talk to them about the unfair rise as am extra $50 a wk = $600 a quarter and $1080 for 3 ppl. They said that they where well within there rights to charge that amount
I looked around for another room but could t find one in the 2 weeks now my lease is up tomorrow
Also just realized our bond was never logged with the rta
What rights do I have? can I Appel the rent rise? As now that we have seperate leases and got a 3rd person to move in it appears as a decrease when in fact it’s an increase


Chris June 2, 2012 at 1:20 pm

Hi Kyra,

the property managers could be fined for not lodging the bond with RTBA. And if there are changes to the lease you definitely entitled to a new copy – in fact I think you should even sign one.


Syamhanin March 4, 2013 at 4:06 pm

Hi Chris,

My fixed term lease have end on 7/12/2012 and my agent have offered me a periodic lease which I have signed and agree. The reason they have offered me this because the owner have decided to sold the property.

The effective date of the new agent is on 1st February 2013 and I have a given a choice to renew the lease on a fixed term with rental increase of AUD 35 per week or vacate the unit.

My question is whether I can continue my periodic lease ?
If I choose to renew the lease on a fixed term with the rental increase, what shall be the effective date of the new rental charges ?

Many thanks,


Chris March 5, 2013 at 11:24 am

Hi Syamhanin, it doesn’t seem the new landlord wants to offer a periodic lease agreement. With the old agent you didn’t even need to sign the periodic one, it continues after the fixed term lease ends, by default. But if the new landlord only wants to offer a fixed term agreement, there’s no other option, it seems. The date your rent goes up will be the date of your new, fixed term lease, should you decide to sign it.


sabrina March 22, 2015 at 5:36 am

I have got a similar fixed term contract and I decide to leave the room ( in the contract said I am a lodger).I doubt about this contract is false,because there is no reference to any law in uk and even there is no name of the lanlord.Where I can ho and show this contract? The lanlord now is angry with me and desperate because I was a sort of income


Mark July 9, 2015 at 2:28 pm

Hi. Just to clarify a few things regarding a periodic agreement. If the tenant decides to leave the property, they need to give 21 days notice. If the landlord wants you out, they are required by law to give you 90 days notice (not 1 month as noted) This come direct from Dept of Fair Trading regarding renting


Chris Lang July 10, 2015 at 12:09 am

Hi Mark,
According to Consumer Affairs VIC the tenants can give a 28-day notice if they are on a periodic lease, and the landlord should give a 60-day notice, if they have a reason to terminate the lease. The 90-day notice only applies to situation when the landlord wants to terminate without a reason.


Sam September 28, 2016 at 10:57 am

Received an email from the agent 16.09.16, regarding invitation to renew lease for a 12 month period from 20.09.16 (the expiry on the original 12 month term). Spoke to the agent Monday 26.09.16 advising we are happy to continue on a periodic lease.
Received a text message yesterday (27.09.16) from the agent “I have spoken to the ownder and he asked if we could have you on a 6 month lease. If you could speak to your partner tonight and let me know tomorrow”. I have replied to the original renew lease email this morning, confirming we are happy to continue on a periodic lease.
Are we obliged to sign for another fixed term? If we don’t sign and the owner wants to readvertise for a new tenant (we’ve paid the rent nearly a week before due for the term of the contract and had no issues so I don’t know why they would) how much notice to vacate would they need to give us?


Chris Lang September 30, 2016 at 10:06 pm

Hi Sam,
No one can make you sign a fixed-term lease if you’re not interested, if the landlord wants a new tenant on a fixed term lease and they decide to give you a notice to vacate, how much notice you will get depends on the reason they choose. This page has a list of various reasons landlord can give why they want you to vacate, and the number of days for each reason:


Jess February 2, 2019 at 12:22 am


My housemates and I are on a periodic lease after living here on a fixed lease for a year because our landlord passed away and we are now in the hands of the public trustee.

We are really in the dark about what this means and being on a periodic lease makes me uncomfortable because moving with only 2 months notice stresses me out.

I love where we live and would sign another lease in a heart beat. What does being in the hands of the public trustee really mean? Does it seem possible under our circumstances that we would be asked to sign another lease? Or should I look at moving out for peace of mind if we eventually do get asked to lease?

Thank you,



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