Tenancy agreement options and bonds
What is the difference between a FIXED TERM tenancy agreement and a PERIODIC tenancy agreement?
What is a FIXED TERM tenancy agreement?
A fixed term is for a specific term e.g. 1 year or can be for a much longer term and is agreed between the tenant and the landlord. It has a start and end date and the terms and conditions of the tenancy agreement can be enforced within the fixed term.
What if the tenant wants to move out before the end of their fixed term?
If a tenant wants to break their lease they are responsible for:
- Rent up until a new tenant moves into the property and takes over the lease
- A proportion of the reletting fee charged to the Landlord by the Property Manager, usually up to 2 weeks rent plus GST
- A proportion of the advertising cost to find a new tenant
The reletting fee and advertising costs are calculated using a specific formula set down by the South Australian Civil and Administrative Tenancies Tribunal (SACAT). If a tenant is breaking their lease early in the agreement the costs will be far greater than if the tenant is breaking the lease towards the end of the agreement.
What notice do I need to give the tenant if I do not wish to renew the lease for a further term?
A landlord is required to give a minimum of 28 days’ notice in writing to the tenant if they do not wish to renew for a further term. If the correct amount of notice is not given the fixed tenancy agreement will end on the end date and then automatically revert to a periodic lease.
What happens if my tenant does not want to renew their lease?
The tenant is also required to provide 28 days’ notice in writing to the landlord if they do not wish to renew their fixed term lease. Throughout the 28 day notice period the landlord or agent can on giving reasonable notice to the tenant (48 hours is considered reasonable) show the property to prospective tenants.
A fixed term lease is guaranteed to the tenant (except when a person with superior title takes possession – e.g. if the mortgagee takes possession of a property, they can issue instructions for the guarantee to be revoked).
What is a PERIODIC tenancy agreement?
A Periodic tenancy agreement is for a non-specific time and only ends when either the landlord or tenant serves notice on the other party.
How much notice is the tenant required to give on a PERIODIC tenancy agreement?
A tenant on a periodic tenancy agreement is only required to give 21 days’ notice in writing to the landlord and is not required to give a specific reason.
How much notice is the landlord required to give on a PERIODIC tenancy agreement?
This is dependent on circumstances and whether there is a reason for the termination of the agreement.
- The landlord is required to give 60 days if they or their child or parent or the spouse of the landlords’ child or parent wishes to move into the property.
- 60 days’ notice if the premises is required for demolition.
- 60 days’ notice when possession of the premises is required for repairs or renovations that cannot be carried out conveniently while the tenant remains in possession of the premises.
- 60 days’ notice when the premises has been sold. The notice period starts from the date of the contract of sale.
- And finally if there is no reason given 90 days’ notice is required.
Is there any other way of terminating a FIXED or PERIODIC tenancy agreement?
Yes. Both a fixed or periodic tenancy agreement can be terminated if mutually agreed by both parties.
What is a SECURITY BOND?
As soon as we have selected a successful tenant a lease agreement is prepared and signed and a security bond is paid by the tenant and lodged with Consumer and Business Services.
How much is the SECURITY BOND?
By law, for properties where rent payable is $250 per week and under, the landlord cannot ask for a bond that is more than four weeks’ rent.
For rent over $250 per week, a landlord cannot ask for a bond that is more than six weeks’ rent.