For both owners and tenants of residential rental properties, deciding between short-term and long-term tenancies is equally important, but the outcomes are different. One party looks for a return on investment and the other needs a secure and affordable place to live.
Legislation Protects Tenancies
Tenancies in Western Australia are controlled by The Residential Tenancies Act and the Residential Tenancies Regulations. The legislation is designed to protect both owners and tenants and sets out the legal responsibilities of both parties. The regulations give guidance regarding issues such as the terms of the tenancy agreement, bond and rental payments and processes for both fixed term and periodic tenancies.
Lessors and Fixed-Term Tenancies
When a lessor offers a fixed-term tenancy, the start and end date and the rental amount is specified on the tenancy agreement. Rent can only be increased if the amount is stated on that agreement. There are other conditions but the advantage of this for the lessor is that the rental income is more secure than a periodic tenancy. The disadvantage is less flexibility to end the tenancy should the lessors’ circumstances change, and they need the tenants to leave before the end date.
Lessors and Periodic Tenancies
A periodic tenancy can last for an indefinite time and ends when notice is given by either party. This option gives lessors more flexibility to end the tenancy. They must give tenants a minimum of 60 days’ notice (unless the tenant is in breach of the agreement, or the property is sold). The disadvantage is that the tenants can move out with a minimum of 21 days’ written notice. The lessor’s rental income is less secure as they must secure new tenants.
Tenants Needs are Different
For tenants needing to choose between these two options, the decision is about rental affordability, proximity of the property to essential services such as schools, parks, shopping and entertainment venues and transport, as well as access to employment opportunities. Tenants are bound by the same conditions on the tenancy agreement as the lessors.
Tenants and Tenancy Options
The fixed term tenancy option gives tenants more certainty and security as the term and the rent are agreed. The periodic tenancy option gives tenants more flexibility than a fixed term tenancy, as they are only required to give a minimum of 21 days’ written notice as previously mentioned.
Our property management staff here at Bunbury Real Estate have considerable experience at both managing rental properties on behalf of lessors and providing tenants with suitable properties. We keep up to date with any legislative changes that may impact our clients and ensure all necessary documentation is completed and lodged as required.