By Tiaan Kotzé | Owner of Propertyscouts Riverside | Hamilton Property Management

Fixed-term or periodic tenancy?

A periodic tenancy has no end date. It rolls on, often loosely described as month to month, until the landlord or tenant gives proper written notice. A fixed-term tenancy runs for a set period stated in the agreement, such as 12 months. In short, periodic offers flexibility, while fixed-term offers certainty for both parties.

What is a periodic tenancy?

A periodic tenancy is a tenancy agreement with no end date. It simply carries on, week after week, until either the landlord or the tenant ends it by giving the correct written notice. Under the Residential Tenancies Act 1986, a periodic tenancy can be agreed from day one, or it can start automatically when a fixed term finishes.

It is the most flexible of the New Zealand tenancy agreements, for landlords and tenants alike.

How does a periodic tenancy work?

The tenant lives in the property under the agreed terms for as long as both parties are happy. A tenant can end it with at least 21 days' written notice. A landlord can end it with 90 days' written notice without giving a reason, or with 42 days' notice in a few specific situations set out in the Act.

The 42-day grounds are narrow, applying only when the owner or a family member needs the home as their main residence (moving in within 90 days of the tenancy ending and staying at least 90 days), when the property is normally used for the landlord's employees or contractors and this was clearly stated in the agreement, or when the property has sold unconditionally with vacant possession required. If a landlord gives less than 90 days' notice, the reason must be written in the notice.

Every notice must be in writing, include the property address and the end date, and be signed. A landlord's notice also must not be retaliatory, meaning it can't be given to punish a tenant for exercising their rights, such as asking for repairs.

On the tenant's side, 21 days is the minimum unless the landlord agrees to something shorter, and that agreement is best put in writing. Even when a landlord has given 90 days' notice, a tenant who wants to leave sooner still needs to give their own 21 days.

What is a fixed-term tenancy?

A fixed-term tenancy runs for a set period written into the agreement, such as six months or a year, with a clear end date. A tenancy of 90 days or less is treated differently, as a short fixed-term tenancy. During the term, neither party can simply give notice to leave early.

How does a fixed-term tenancy work?

Both parties are committed until the end date. As that date approaches, either side can give written notice that they don't want the tenancy to continue, but only between 90 and 21 days before expiry. If nobody gives notice in that window, and nothing else is agreed, the tenancy becomes periodic automatically.

This window is called the effective period. Since the law changes that took effect in 2025, a landlord no longer needs a reason to end a fixed term at its expiry date.

Ending a fixed term early is a different matter. The main options are a written agreement between the landlord and all tenants, where the landlord may charge only their actual and reasonable costs, such as advertising, or assigning the tenancy to a new tenant. A landlord must consider an assignment request and cannot decline it unreasonably or ban assignment in the agreement.

Beyond that, either party can apply to the Tenancy Tribunal if an unexpected change in circumstances would cause severe hardship. The Tribunal weighs both sides and may order compensation. Separate rules also allow a tenant to withdraw after family violence, and a landlord to give 14 days' notice where a tenant has been charged with assaulting them, their family or their agent.

Short fixed-term tenancies of 90 days or less end on the agreed date. No notice is needed, and they do not roll over into a periodic tenancy.

What is the real difference between the two?

It comes down to certainty versus flexibility. A fixed term locks in both parties for an agreed period. A periodic tenancy lets either side move on with notice, but neither knows how long the arrangement will last.

The pros and cons of a periodic tenancy

For tenants, the big advantage is freedom. A new job, a relationship changes, or a house purchase can be handled with 21 days’ notice. The downside is less security, because the landlord can also end the tenancy, although 90 days gives time to find somewhere new.

For landlords, a periodic tenancy makes it easier to respond if plans change, such as selling or moving back in. The trade-off is that a good tenant can leave on fairly short notice, which can mean an unplanned vacancy and reletting costs.

The pros and cons of a fixed-term tenancy

For tenants, a fixed term offers stability. You know you have a home until a set date, which helps with school terms, work contracts and budgeting. The catch is that leaving early isn't simple, and you may need to cover reasonable reletting costs.

For landlords, a fixed term gives predictable income and lets you plan maintenance and renewals around a known date. The limitation is that you are committed too. If your circumstances change mid-term, you generally can't give notice to end it early.

What happens at the end of a fixed-term tenancy?

There are three possible outcomes. Both parties can agree in writing to renew or extend for another fixed term. Either party can give notice within the effective period to end the tenancy on the expiry date. Or nobody acts, and it becomes periodic.

This is where we see people caught out most. A landlord cannot simply tell a tenant to leave because the end date has arrived. If the 21-day mark passes without valid notice, the tenancy continues as periodic, and the periodic notice rules apply from then on. Our practical recommendation for both landlords and tenants is to diarise the 90-day mark the moment the agreement is signed, so there is time to talk.

Some agreements also give the tenant a right of renewal. If so, the tenant must tell the landlord in writing at least 21 days before the term ends.

Which arrangement suits which situation?

A few examples show how the choice plays out.

Tracy has just taken up a 12-month nursing contract at Waikato Hospital. A 12-month fixed term gives her a settled base for the length of the role, and gives her landlord a year of steady rent. If her contract is extended, the tenancy can simply roll into a periodic arrangement unless either of them gives notice in the effective period.

Daniel owns a rental while working in Australia. He hopes to move home in about a year but isn't sure of the date. A periodic tenancy may suit him better, because when he returns he can use the 42-day ground to move back in, provided he genuinely meets its conditions. On a fixed term, he would generally need to wait until the end date.

Sam and Priya are halfway through a fixed term when Sam's job moves to Tauranga. They can't just give 21 days' notice. They could ask the landlord about ending early by agreement, possibly covering reasonable reletting costs, or ask to assign the tenancy to a new tenant.

As landlords ourselves, we find the decision usually comes down to two questions. How certain are your plans over the next year, and how much would an unexpected vacancy or move cost you?

Fixed-term vs periodic tenancy: a quick comparison

The takeaway

Neither option is better in every case. A periodic tenancy trades certainty for flexibility, and a fixed term does the opposite. The right choice depends on the plans and priorities of both the landlord and the tenant, and it is worth an honest conversation before anyone signs.

If you are weighing this up for a rental in the Waikato, Heidi and I are always happy to talk it through with you.

Disclaimer

This article provides general information about New Zealand tenancy law, current as at October 2026. It is not legal advice and should not be relied on as a substitute for advice about your own situation. Tenancy law can change, so please check the latest rules with Tenancy Services or seek advice from a qualified professional before acting. Propertyscouts Riverside accepts no liability for decisions made based on this information.

About the Author:

Tiaan Kotzé is the co-owner of Propertyscouts Riverside, a Hamilton-based property management company. Together with his wife Heidi, he helps landlords throughout Hamilton and the Waikato manage their rental properties, navigate tenancy legislation, and maximise long-term investment performance.