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Reasons a Landlord should favour a fixed term and shun the month-to-month term

Generally fixed term tenancies are perceived to give the Landlord the guarantee of a tenant for the entire term and a predictable revenue stream. Not so!
Although in a fixed term tenancy Tenants have the benefit of having a secured place of residence for a secured period of time at a fixed rental rate, many Tenants do not hesitate to exit the agreement or abandon the tenancy.

Seven benefits of fixed term tenancies*:

With a definite start date and a definite end date it remains the Landlord’s prerogative at expiry to terminate the tenancy, or to propose renewal or change in the tenancy term.
The Landlord has the option to offer a term as short as one month at a time.
The Residential Tenancies Act of Alberta stipulates that notice to terminate is not required in order to terminate a fixed term tenancy.

Where a tenancy is disruptive, the remaining time left in a fixed term may bring natural and timely resolve, or at least leaves limited time the problem tenancy has to be endured.
Fixed terms give the Landlord measured time to get-to-know the Tenant and build trust.
Having fixed terms of various lengths with selected tenants can greatly assist in managing revenue during high vacancy rates in a property portfolio.
Fixed terms allow the Landlord who is considering selling or claiming back the property for own/family use, to plan accordingly.

Month-to-month periodic tenancies may be less cumbersome to manage, but are difficult for Landlords to exit from and could get very messy if not dissolved properly. A good way to view fixed term tenancies versus month-to-month tenancies is to compare it to having a solid pre-nuptial in place so that a divorce more likely comes to a somewhat cordial end.
How to manage fixed term tenancies effectively and exiting month-to-month tenancy agreements will be addressed in coming articles.

*This article considers fixed term tenancies as opposed to monthly periodic tenancies. The benefits are simplified and the value of the benefits is achieved subject to meeting certain tenancy management criteria. The Residential Tenancies Act of Alberta interprets a fixed term to mean a tenancy under a residential tenancy agreement for a term that ends on a day specified in the agreement.

The content of this article is written in the context and legal framework of the Residential Tenancies Act of Alberta, Canada.

Kim Kahts specializes in Alberta evictions and residential tenancy disputes. Follow her on Twitter: Kim Kahts LandlordRX @LandlordRX

Visit Associated Eviction Services for services, practical solutions and tips for Landlords on disputes, tenant eviction, enforcement and free samples of Alberta residential tenancy forms and notices for landlords.

Associated Eviction Services (AES) offers paralegal services to local and remote Alberta real estate investors, property managers, real estate agents representing investors and building managers. We specialize in residential tenancy dispute matters within Alberta jurisdiction.


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