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Tenant lease renewal - Is this the norm?

Discussion in 'Property Management' started by peter_h, 1st Aug, 2016.

  1. peter_h

    peter_h Member

    Joined:
    24th Jan, 2016
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    QLD
    Hi everyone,

    I have a question with my parents IP (an apartment in Sydney) that I have personally never heard of.
    But I am a newbie myself with just the one IP, so I don't trust my own knowledge yet, so was hoping for some collective wisdom.

    According to my parents, after each tenant signs a 12 month contract, once this period is over, they apparently don't sign any further contracts, and everything is "month to month."

    They have owned this apartment for about 10 yrs now, and this is apparently how they've always done it with this PM.

    Now this has not happened to me, both while I was renting (albeit in QLD), and as a landlord.
    Could the forum comment whether this is common practice?

    Thanks very much
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes, the existing contract terms continue.
     
  3. peter_h

    peter_h Member

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    Thanks Terry.
    So if I'm understanding this, the terms of the contract continues, just that there isn't a 6 or 12 month term, and that it is month to month?
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yep.

    But the amount of notice needed to leave would change because of the legislation.
     
  5. peter_h

    peter_h Member

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    Thanks Terry
     
  6. Xenia

    Xenia Adelaide Property Manager Business Member

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    Yes the tenancy will revert to a periodic tenancy after the term ends.
    However it is not normal to not renew to another fixed term lease. Most agencies will renew the leases because we like fixed term leases more than we like periodic leases.
     
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  7. peter_h

    peter_h Member

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    Thanks Xenia for your help, that makes a lot of sense
     
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  8. D.T.

    D.T. Adelaide Property Manager Business Member

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    Sorta half right.

    If a lease is not renewed then yes it continues onto periodic. However it doesn't have to. Its preferable for the lease to be renewed for a set duration. This provides more stability and certainty for all involved.
     
  9. willair

    willair Well-Known Member Premium Member

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    May never be a problem till there is a problem,been dealing with a insurance company over the past few weeks,and both times on 2 different properties ,the first item the landlord insurance company wanted to know was,what sort of lease was in place,and if i had a copy..