Fixed Term Lease
A fixed lease term is when a tenant agrees to rent your property until a specific date. For example, if the tenant signs a one-year fixed term starting on July 1, it would end on June 30 of the following year. Once the agreement has been signed, the tenant is responsible for paying rent during this entire length of time.
Fixed terms are the most popular lease type because they offer landlords peace of mind for a set period of time. During this term, landlords don’t have to worry about finding new tenants and are guaranteed steady income until the lease is up. A fixed lease term also prevents tenants from leasing a space temporarily and moving on quickly.
This type of security appeals not only to landlords, but to tenants as well. A locked-in rental period allows tenants to budget their yearly living expenses according to a fixed rent price in the Lease Agreement, without worrying about rent increases or finding a new place to live.
The benefits are plentiful, but there are still some disadvantages to this type of arrangement. A fixed lease doesn’t allow you to make any changes to the lease, such as increasing rent or amending other terms, unless allowed by both the lease and your jurisdiction’s landlord-tenant laws. Additionally, you cannot make any extensive improvements that would force the tenant to vacate during the fixed term.
A fixed lease does not usually require a notice letter, since the end date is already set, but it is in both parties’ best interest to provide adequate notice anyway when the lease is coming to an end.
A tenant cannot break their fixed lease, nor can a landlord end their tenancy before the fixed lease term is up. The tenant can only leave early if the landlord allows them to sublet the property
for the remainder of the lease period, or if both parties agree to terminate the tenancy before the fixed end date.
If a tenant decides to leave early anyway, they may have to pay rent until the landlord finds another tenant to occupy the space. For example, if a tenant leaves three months prior to the end of the fixed term, and the landlord does not find someone for two months, the tenant may be obligated to pay for the time the space is vacant (in this case, two months). During this time, the tenant may also have to reimburse the landlord for the cost of advertising the property.
While a landlord cannot terminate a tenancy before a fixed lease term is expired, they can evict a tenant for substantially failing to meet lease obligations, such as repeatedly missing rent payments, inflicting serious damage to the rental, or performing illegal activities--all the usual grounds for eviction. Likewise, a tenant may be able to end a fixed lease before expiry if the landlord has breached the terms of the lease, such as failing to repair an issue with the property that is affecting the health or safety of the tenant.