A buyer has purchased a property and on the contract, the tenant schedule has been filled out with the term of lease stated as “periodic”. This can be confusing to understand what does periodic mean, when does the tenancy end and how does it impact a buyer’s intention to use the property.
What does it mean?
A periodic agreement is defined by the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) as an agreement that is not a fixed term agreement. It is a broad criteria but essentially, a periodic agreement is a rental agreement that has no set end date, the agreement continues to roll over (e.g. on a weekly basis) until either party gives notice of the tenancy agreement coming to an end.
There are many ways a periodic agreement can arise, including:
- an agreement between the landlord and the tenant for a periodic tenancy; or
- a fixed term agreement that use to be in existence, but by the end date of the fixed term agreement, a new agreement has not yet been entered into.
When does a periodic tenancy end?
Because a periodic tenancy has no set end date, the only way to end it is for either the property owner or the tenant to provide written notice to the other. If a tenant provides notice to leave the property, they must do so by providing a Residential Tenancies Authority Form 13 Notice of intention to leave and the last day must be no earlier than the date which is 2 weeks after the date the notice is given.
If a property owner wants a tenant to leave the property, they must deliver to the tenant a Residential Tenancies Authority Form 12 Notice to leave and the end date must be either:
- if a contract of sale for the property has been signed, a date of no earlier than 4 weeks after the contract date; or
- in all other circumstances, a date that is 2 months from when the notice is given.
Does a Periodic Tenant ruin your Chance to Live in the Property?
A large benefit of purchasing a property to live in is the ability to claim a transfer duty home concession. This is a significantly lessened amount compared to purchasing the property as an investment property. Because there is no end date to a periodic lease, a buyer may be concerned whether they are able to live in their purchased property within the time required to claim a home concession.
The good news is that the Queensland Revenue Office provides a considerably long period for a buyer to move into the purchased property as their home. So long as a buyer moves into the property as their principal place of residence for at least 12 months, within 12 months of the settlement date then a buyer can claim a home concession. This is great news for buyers with a periodic tenancy in place, is the minimum period for a notice to leave is only 2 months. Accordingly, this gives the buyer flexibility to uphold the periodic tenancy for a couple of months before providing the tenant with 2 months’ notice to leave before moving into the property as their home.
Takeaways
While in the grand scheme of renting a periodic tenancy is not ideal for a landlord however, it is not a dealbreaker for buyers purchasing a property. As long as buyers are proactive in ensuring:
- notice to leave is given within the correct end dates; and
- being mindful of the last day they must move into the property to claim the home concession,
a buyer has flexibility in renting out the property while still moving into it at a later date. By doing so, buyer will still be able to claim the home concession for transfer duty.
If you have any questions or require assistance with a conveyancing matter in Queensland that may involve a periodic tenancy then please contact the property team at My Property Protect for more information.
Written by
Kayleigh Swift, Associate
http://www.mypropertyprotect.com.au/
kayleighs@mypropertyprotect.com.au
(07) 3506 0002
AND
Chloe Skubis, Graduate Law Clerk
http://www.mypropertyprotect.com.au/
admin@mypropertyprotect.com.au
(07) 3506 0002
About the authors
Kayleigh Swift is an associate in our Commercial and Property team who assists with Employment Law matters. With a high level of experience in commercial and retail leasing, voluntary and involuntary purchase and sale acquisitions, property development and employee relations, Kayleigh provides practical advice to ensure smooth business transactions.
Chloe Skubis is a Graduate Law Clerk in our Property team who assists with various conveyancing transactions. Chloe is very experienced in residential conveyancing and is a problem solver. She always provides efficient service to all her clients.
Tags – #conveyancing #property #renting #qld #rta #transferduty #tenant #landlord #apartments #purchase #propertylaw #contract #propertycontract #REIQcontract #residentialproperty
