Difference between Fixed Term Agreement and Periodic Agreement

Difference between Fixed Term Agreement and Periodic Agreement

When it comes to renting or leasing property, there are two main types of agreements that landlords and tenants can enter into: fixed term agreements and periodic agreements. While these may seem similar at first glance, there are important differences between the two that both landlords and tenants should be aware of.

Fixed Term Agreements

A fixed term agreement, also known as a lease, is a rental agreement that is set for a specific period of time, usually six months or a year. This type of agreement outlines the terms and conditions of the tenancy, including the rent amount, payment schedule, and any restrictions on the use of the property.

One of the main benefits of a fixed term agreement is that both the landlord and the tenant have a clear understanding of their obligations and responsibilities for the duration of the agreement. Additionally, a fixed term agreement offers the landlord a level of security because the tenant is typically required to pay rent for the entire duration of the lease, regardless of whether they decide to move out early.

Periodic Agreements

A periodic agreement, on the other hand, is an agreement that continues on a rolling basis, typically month-to-month. With a periodic agreement, there is no set end date, and either the landlord or the tenant can terminate the agreement with proper notice, usually 30 days.

One benefit of a periodic agreement is that it offers more flexibility for tenants who may not know how long they need to rent the property. Additionally, landlords have the ability to increase rent or make changes to the agreement with proper notice, which can be beneficial if the cost of maintaining the property increases.

Key Differences

The main difference between a fixed term agreement and a periodic agreement is the length of the agreement. A fixed term agreement has a set end date, whereas a periodic agreement continues on a rolling basis. Additionally, a fixed term agreement offers more security for the landlord, while a periodic agreement offers more flexibility for the tenant.

Which Agreement is Right for You?

Deciding between a fixed term agreement and a periodic agreement ultimately depends on your individual needs and circumstances. If you are looking for stability and security, a fixed term agreement may be the best option. However, if you need flexibility or are unsure how long you will need to rent the property, a periodic agreement may be a better fit.

Regardless of which agreement you choose, it is important to carefully review the terms and conditions before signing. This will help ensure that both you and the landlord are on the same page and that there are no surprises down the road. As always, if you have any questions or concerns, be sure to consult with a legal professional.

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