What to Consider When your Lease is Ending
For both the tenant and the landlord, the date a lease ends on a rental property should be one that’s firmly fixed in your calendar.
Why? Because as the date of lease expiry nears there are some decisions that need to be made by both parties.
If your lease is nearing its end, here’s what you need to know.
A Quick Guide to Leases
In short, a lease is a binding agreement that a tenant will inhabit a property, look after it and pay a set amount of rent for a specific period of time.
Meanwhile, the landlord agrees to provide a home that is safe and secure, honour the tenant’s right to privacy and remedy any maintenance issues that might need attention.
Usually six or 12 months (and in some cases longer or shorter) this ‘fixed-term’ lease gives surety to each party.
In the case of the landlord it offers the security that their property will be looked after and earn a set income.
For the tenant, a lease offers the certainty that, providing they adhere to the lease conditions, they will have a place to call home for a set fee.
So, what happens when that lease ends?
When a Lease Ends
When a lease is nearing its end, both parties have a couple of options they need to consider. And they need to be weighing these up well in advance of the lease-end date.
Whether to enter a new lease is among the questions they need to answer, and if so, under what conditions.
Meanwhile, when a lease is nearing its end, the parties will be required to outline their intentions in writing, and there are timeframes in which this must occur.
In the case of the landlord, they can offer to rent that property to the same tenant again for another set period. As part of this offer, they can opt to change the price of the property provided they give sufficient notice.
If they choose, they can also decide to give notice that the lease will not be renewed. No specific reason is required, but again sufficient notice is required.
They can also allow the tenant to stay but with no set period in mind. Known as a periodic agreement, this allows the landlord to then raise the rent or give a tenant notice within a timeframe that varies depending on the state or territory.
In the case of the tenant, they can also get the jump on renewing the lease for a set period, and can also propose a price change.
They can also indicate they do not wish to stay and would rather leave once the lease expires. Again, written notice of their intentions is required, and it varies across states and territories.
The timeframes at present are:
- Northern Territory and Queensland: 14 days before lease ends.
- New South Wales: at least 14 days if the date is at the end of the tenancy agreement, or 21 days if the end date is after the fixed term.
- Victoria: 28 days before lease ends.
- Australian Capital Territory: 21 days before lease ends.
- Western Australia: 30 days before lease ends.
- South Australia: 28 days before lease ends.
Finally, a tenant can also elect to go on a periodic lease, but should be aware the rental fee may change and security of tenure may not be guaranteed. If there’s a chance they will be relocating elsewhere this gives the tenant the chance of vacating a property without incurring re-let and /or advertising fees.
Talk to Your Property Manager
Handling end of leases is one of the many tasks that your property should undertake on your behalf.
They should let the landlord know when a lease is due to expire, indicate the market price for that property, whether they advise altering the property’s rental fee, and also discuss whether the current tenant remains the most suitable inhabitant.
Furthermore, they should prepare any proposed lease documentation, advise the tenant of their requirements and liaise with them about their intentions.
If you’re looking for property managers that will work with you to navigate the ins and outs of leases, our Eview agents can assist. Call us 1300 438 439.