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Sunday, January 3, 2010

Landlord Series - Tenancy Agreement (part 3)

The Landlord Series are various tips to help the owner of a property become a better and more informed landlord.


In this series we explain the Tenancy Agreement (part 3).


In Part 2 we explained the Pros and Cons of leases (http://www.garamarkpropertymanagement.ca/news/2009/12/landlord-series-tenancy-agreements-part_30.htm)



Today we are going to explain the different term lengths of a lease.

There are two types of Tenancy Agreement terms: Fixed and Month to Month.

A Month to Month agreement is exactly the way it sounds: It is an agreement that continues on from Month to Month until the tenant gives a months notice and moves out.

A Fixed Term agreement is an agreement made between the landlord and tenant for a specified period of time. The most common length of time is a year.

Many landlords prefer the Month to Month lease because they think that it will be easier to evict a tenant. This is false! As long as a tenant is paying rent in your rental property, there are only a small handlful of legal reasons to terminate a Tenancy Agreement.


A fixed term agreement may be more work because you need to give the tenant 3 months notice to renew their lease, but we like the fixed term agreement for the following reasons:

(1) A tenant is more likely to stay the entire year, creating less turnover in your property
(2) If a tenant wants to move mid-agreement, they have to sublet the unit themselves
(3) Most lending institutions require a lease to be in place for funding, and they prefer (some require) a year lease to prove stability within your rental property

Therefore, even though it may be more work to maintain a lease, the long term benefits outweigh the negatives!

Got questions? Email us at owners@garamark.net
Garamark Property Management is located in Winnipeg, Manitoba and successfully balances protecting the investment of an owner and retaining happy tenants.

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