Ending a Tenancy
What you need to know
Prescribed Grounds
This means that if a tenant is on a “periodic tenancy” (one with no end date), one of the prescribed grounds must be provided if a tenant is served with a Notice to Vacate. Timeframes are still the same; it’s just that the reason for someone being asked to leave a property is now limited.
The good news is that the prescribed grounds reflect the same reasons that most investors would provide if they wanted a tenancy to end, such as property sale, owner moving back in, renovations, and so on.
However, this change has removed the flexibility that both owners and tenants previously enjoyed with a periodic tenancy. For example, if a tenant is building a house and there have been some delays with handover, a periodic tenancy is an excellent solution.
What’s interesting is that, under the new rules, a fixed-term tenancy does not have the same prescribed grounds for termination. The appropriate notice period must still be provided before the end of the agreement, but no specific reason is required if notice is provided to the tenant.
The Approach of Your Property Team
There are several reasons why we have always strongly advised tenants to stay on a fixed-term lease, the most important of which is security for all parties involved.
Allowing a fixed-term lease to lapse into a periodic tenancy made sense in the past where some clients may have wanted to keep their options open, perhaps to see “how things pan out” with a situation. But not any longer. When an agreement no longer has a fixed end date, an owner’s options become very limited after October 1st.
This is why, as the end of a fixed-term agreement approaches, we will probably be a little more insistent than in the past about what your plans are. If a tenant is offered a lease renewal but refuses to sign a new agreement (perhaps to hedge their bets), a Notice to Leave will be issued.
Of course, if this action is required, we will discuss it with you at the time. And, while this approach may appear tough, it is simply the best way to protect your interests as our client in the future. Our industry body has also advised us to take this approach.
Things to Keep in Mind
The goal of the legislative changes is to provide more security to tenants, especially as more people choose to rent for longer periods of time than in the past. This is something we wholeheartedly support.
It is also beneficial for investors to have that assurance. The changes simply mean that you should think about your property plans a little further ahead than you might have previously.
If you would like to learn more about the upcoming changes to Tenancy Law in Queensland, please be sure to read our articles Emergency Repairs and Pet Laws.
If you have any questions or would like to have a chat about how Your Property Team can help you with your investment property, click here to get in touch, we’re ready to help!
Please keep in mind that this post is not intended to provide financial or legal advice. Before making any decisions for yourself, please speak with your expert financial and legal advisors.
