What’s the difference and which should I choose?
As a landlord or a tenant, it’s important to know what kind of contract or agreement you are entering into because your rights and your responsibilities can change depending on whether you are in a Fixed-term or Part 4 tenancy. The differences mostly apply when either party decides they would like to end the tenancy and so below we deal with some of the situations where the type of agreement chosen, changes these rights or responsibilities.
Fixed-term: This is a tenancy agreement that includes a strict set amount of time, usually 12 months but can be any length.
Part 4: This is either a 4 or 6 year agreement depending on when the tenant moved in. The tenant acquires certain rights after 6 months. If your tenancy started on or before 24 December 2016, this period is 4 years. If your tenancy started after 24 December 2016, this period is 6 years
More detailed definitions of the Fixed-term or Part 4 tenancies can be found here.
Landlords wishing to terminate the tenancy
As a landlord, if there is a chance that you may need the property vacant in the near future, you will need to consider the type of tenancy you choose carefully. This may include your intention to sell or have a family member use the property for example.
A fixed term tenancy cannot be terminated during the term of the agreement, only once the term has ended. It is important to note that the Fixed-term should have ended before the notice is served. So if a 12 month lease is signed for example, the appropriate notice period cannot begin until that term has expired.
During a Part 4 tenancy, a landlord can serve notice at any point during the tenancy. However, there are two distinct differences depending on when the notice is served.
1) During the first 6 months of every 4 year cycle, the notice does not need to state the reason for ending the tenancy and does not require a solicitor’s letter.
2) During the remaining periods of the tenancy, the notice must state the reason for the termination and it must also include a statutory declaration stating the landlord’s intention to sell or have a family member move in for example.
The RTB’s sample notices of termination can be found here.
The notice periods required will be dependent on the time the tenant has been in the property regardless of the type of tenancy.
Tenants wishing to terminate their contract
During a Part 4 tenancy, the tenant can terminate at any stage and without reason providing that they serve the landlord with a valid notice of termination and give the required period of notice.
Ending a Fixed-term tenancy is not as simple and the tenant may lose their deposit if they leave before the Fixed-term expires, even if they give the correct amount of notice. Any deduction from the deposit would usually be for a loss of rent in these cases.
There are some exceptions, see here.
Terminating a tenancy can be tricky so if you would like some advice, contact us.
Note: This guide is for information purposes only and as the laws change regularly, you should contact us for up to date advice.