When renting out your property, choosing a fixed term or periodic tenancy agreement can make a big difference to your flexibility, security, and compliance with New Zealand law. Here’s a clear breakdown of what each option involves, their advantages and disadvantages, and what recent legislative changes mean for you as a landlord.
What the Law Says Now
New Zealand’s tenancy law has been changing in recent years. Two major amendments affect fixed term and periodic tenancies:
- Residential Tenancies Amendment Act 2020: Came fully into effect in 2021. Among its changes, fixed term tenancies signed on or after 11 February 2021 will automatically convert to periodic tenancies at the end of the fixed term unless certain conditions are met (both parties agree otherwise, or the correct notices are given).
- Residential Tenancies Amendment Act 2024: This more recent reform, which began coming into force from 30 January 2025, has rolled back or altered several of the 2020 changes. Key changes include adjustments to notice periods, reinstatement of some no cause terminations, and more flexibility for both landlords and tenants.
Fixed Term Tenancies
- A fixed term tenancy is for a set period, for example 12 months. The duration must be stated in the agreement.
- If a fixed term tenancy was signed on or after 11 February 2021, it automatically converts to a periodic tenancy at the end of the fixed term unless:
- The landlord and tenant agree to renew, extend, or terminate the tenancy
- Either party gives notice between 90 and 21 days before the fixed term ends that they do not intend to continue
- The landlord gives notice using one of the valid specified grounds for termination under the law
- At the end of the fixed term, a landlord can now end the tenancy (choose not to renew) without needing a specific reason due to changes brought in by the 2024 amendments.
Periodic Tenancies
- These have no fixed end date. They continue until either landlord or tenant gives lawful notice.
- The required notice periods for landlords to end a periodic tenancy have changed. As of January 2025:
- Landlords can use 90 days’ notice without cause to end a periodic tenancy
- There is a 42 day notice period in prescribed cases such as when the landlord or family member wants to move in, or where there is an unconditional agreement for sale requiring vacant possession
- For tenants, the notice period to end a periodic tenancy is 21 days.
Short Fixed Term Tenancies
- Defined under NZ law as fixed term tenancies of 90 days or less.
- These do not automatically convert into periodic tenancies when they end. The tenancy ends on the agreed expiry date. Written notice by either party is not required for ending a short fixed term tenancy at its natural end.
Advantages and Disadvantages of Fixed vs Periodic Tenancies
Fixed Term Tenancy
- Provides stability for both landlord and tenant
- Reduces vacancy risk and gives predictable cashflow
- Less flexible, harder to end early unless specific grounds apply
- Encourages tenants to treat the property as a longer term home
Periodic Tenancy
- Offers flexibility if you may sell, renovate, or need to move in
- Easier to adjust to changing circumstances but may mean more turnover
- Landlords must comply with notice rules carefully
- Tenants can leave at short notice, which can increase vacancy risk
What Landlords Should Think About
- How long do you intend to keep the property rented?
- Do you prefer cashflow stability or flexibility?
- What type of tenants does your property attract in the current market?
- Are you confident in applying the correct notice rules?
- How important is long term tenant care compared with flexibility?
Key Changes from the 2024 Amendment Act
- Reinstated 90 day no cause terminations for periodic tenancies
- Reinstated 42 day notice periods for landlord or family moving in, employee housing, and sale with vacant possession
- Tenant notice to end periodic tenancy reduced back to 21 days
- Landlords can now end fixed term tenancies at the end of the term without needing specific grounds, provided correct notice is given
Why Work with Crockers
Professional property managers ensure you remain compliant and get the most out of whichever tenancy type you choose. Crockers can:
- Keep you up to date with changes in tenancy law
- Draft correct tenancy agreements
- Manage renewals and rent reviews within the law
- Track key dates and notice periods
- Handle disputes, arrears, and breaches correctly and efficiently
Which Type is Best for You
- If you want long term stability, choose fixed term with renewal options
- If you need flexibility for sale, renovations, or moving back in, a periodic tenancy may be better
- For short seasonal needs, consider a short fixed term tenancy
- If you want less turnover and better tenant care, a fixed term is usually preferable
Final Thoughts
Both fixed term and periodic tenancies have their place. The best choice depends on your property, your plans, and your tenant market. With the recent law changes, it is more important than ever to make the right decision and handle notices correctly.
If you are not sure which is best for you, talk to the Crockers team. We can ensure your tenancy is set up properly, give you peace of mind, and protect your investment.
