Fixed-Term vs Periodic Tenancy in Wellington: Which Should You Use in 2026?
By Dave McCarry | 9 September 2026
Should Wellington landlords use a fixed-term or periodic tenancy in 2026?
This is one of the questions I get asked most often by Wellington landlords who are either setting up a new tenancy or reviewing an existing arrangement. And since the Residential Tenancies Act was amended in January 2025, the answer has changed in ways that matter.
Before those changes, periodic tenancies felt risky to many landlords because you couldn't end them without a specific ground. Now that 90-day no-cause notices are back, the calculus has shifted. But fixed-term tenancies still offer something periodic agreements don't: certainty on both sides for an agreed period. Understanding the difference, and the traps in each, will help you make the right call.
The core difference between fixed-term and periodic tenancies
A fixed-term tenancy runs for a set period, with a clear start and end date written into the tenancy agreement. Common fixed terms are six or 12 months. Tenancies of 90 days or less are treated differently under the Act and have separate rules. Both parties are committed for the full term: the tenant can't simply give notice and leave mid-way without consequences, and you as landlord can't end it early without a valid ground under the Residential Tenancies Act 1986.
A periodic tenancy has no fixed end date. It continues indefinitely until one party gives valid written notice. Tenants can end a periodic tenancy with 21 days' notice. You as landlord can end it with 90 days' notice (no cause required), or 42 days' notice in specific circumstances covered below.
That's the simple version. The practical implications go further, and this is where landlords get caught out.
What the 2025 RTA changes mean for each tenancy type
The Residential Tenancies Amendment Act 2024 took effect on 30 January 2025 and changed several things that affect this decision.
For fixed-term tenancies: You can now end a fixed-term at its expiry date without needing a specific reason. But you must give written notice within a strict window: no earlier than 90 days before the end date, and no later than 21 days before it. If you miss that window entirely, the tenancy converts to periodic automatically on the expiry date, and you lose the ability to end it cleanly.
This is a common trap. A landlord who signs a 12-month agreement in October, gets busy, forgets to diarise the notice window, and misses the deadline is now in a periodic tenancy with a tenant they may have wanted to move on from. I walk landlords through this every few months. The fix is simple: set a calendar reminder when the 90-day window opens, then make a decision well before the 21-day deadline.
For more detail on how notice periods work for both fixed-term and periodic tenancies, the earlier post on how to end a tenancy in Wellington covers the mechanics in full.
For periodic tenancies: The 90-day no-cause notice is back, which means you can end a periodic tenancy without having to justify your decision to the Tenancy Tribunal. You do need a genuine written notice stating the termination date. Retaliatory notices (given in response to a tenant asserting their rights, such as asking for repairs) can still be challenged, so the process needs to be clean.
A shorter 42-day notice applies when one of these specific grounds exists: you or a family member intends to move into the property and live there for at least 90 days, there is an unconditional agreement for sale requiring vacant possession, or the property is normally used or was acquired to house employees or contractors and this is stated in the tenancy agreement and it is now required for that purpose.
Tenants on a periodic tenancy can give just 21 days' notice to leave. In a softer rental market, this is the main practical risk for landlords: you might find yourself re-letting with less time to prepare than you'd like.
When to use fixed-term vs periodic in Wellington
Here's how I think about this for Wellington properties in 2026.
Start with a fixed-term for a new tenant. When you've just signed a new tenancy agreement, you don't yet have evidence that the tenancy will work well. My usual approach with a new tenancy is to start with a fixed term, typically 12 months. This gives both parties greater certainty through the settling-in phase and provides a natural point to reassess once it expires. A fixed-term also works well when you want to align the lease end date with a time of year that suits re-letting: for example, avoiding a mid-winter vacancy in Kelburn or Karori where the rental market softens.
Consider periodic for established, reliable tenants. Once you've had a good tenant for 12 to 24 months and have a solid track record with them, a periodic arrangement can suit both parties. The tenant gets flexibility. You get certainty that if something changes on your end, the 90-day no-cause notice gives you a clean pathway, whether you want to renovate, move in yourself, or bring the tenancy to a close before selling. Some long-term Wellington tenants actively prefer periodic arrangements because it gives them the option to leave with 21 days' notice if their circumstances change. That preference can be worth something if it means keeping a great tenant in your property.
Be careful with periodic in a higher-turnover property. Student accommodation near Victoria University, short-lease flats in Te Aro, or properties that historically attract shorter-stay tenants are all situations where a fixed-term gives you more protection. A periodic tenancy means you could be re-letting within three weeks if a tenant moves out suddenly. That can create pressure in a softer segment of the market where properties may take several weeks to re-let.
Don't ignore the notice window if you go fixed-term. The single biggest operational risk with fixed-term tenancies in 2026 is missing the 90-to-21-day notice window. Diarise it. Write it into your management process. If you're managing the property yourself, this is one of those tasks that gets deprioritised when life is busy. Professional property management includes this as a standard process, which is one of its practical values beyond the basics.
Your choice of tenancy type also affects how you handle situations like a tenant wanting to add a flatmate, or you needing access for maintenance. For a look at how tenant screening quality connects to tenancy stability, the post on tenant screening red flags in Wellington is worth reading alongside this one.
Every tenancy is different, and what works for a three-bedroom family home in Karori is not necessarily the right call for a two-bedroom apartment in Thorndon. The right structure depends on your property, the tenant profile you attract, your investment timeline, and what you need to be able to do in the next one to two years.
Frequently Asked Questions
What happens if I miss the notice window on a fixed-term tenancy in Wellington?
If you don't give written notice within the 90-to-21-day window before the fixed-term end date, the tenancy automatically converts to periodic. You can no longer end it at the expiry date. To end the tenancy after that, you'll need to give either 90 days' notice (no-cause) or 42 days' notice if a specific ground applies, such as an unconditional agreement for sale requiring vacant possession or you moving in yourself.
Can a tenant leave a fixed-term tenancy early in New Zealand?
Generally, no. A tenant cannot simply give 21 days' notice and walk away from a fixed-term tenancy. The landlord and tenant can agree to end it early, and there are limited legal exceptions, including severe hardship and family violence. If the parties agree to end the tenancy early, the tenant may have to meet the landlord's actual and reasonable costs associated with ending and re-letting the tenancy.
How much notice does a Wellington landlord need to give to end a periodic tenancy?
Under the Residential Tenancies Act 1986 as amended in January 2025, a landlord can give 90 days' written notice to end a periodic tenancy without needing to give a reason. A shorter 42-day notice applies in specific circumstances: if you're moving into the property yourself, if there is an unconditional agreement for sale requiring vacant possession, or if the property is normally used or was acquired to house employees or contractors and this is stated in the tenancy agreement. The notice must be in writing and state the termination date clearly.
Which tenancy type is better for Wellington landlords in 2026?
My usual approach with a new tenancy is to start with a fixed term, typically 12 months. This gives both parties greater certainty for the initial period and provides a natural point to reassess the arrangement. Once the initial term is up and a good relationship is established, many landlords let the tenancy roll into periodic for added flexibility on both sides.
Does a periodic tenancy convert to fixed-term automatically in New Zealand?
No. A periodic tenancy does not automatically become fixed-term. If you want to move from periodic to fixed-term, both landlord and tenant must agree and sign a new or varied tenancy agreement. You cannot unilaterally convert a periodic tenancy to fixed-term without the tenant's written consent.
Choosing between fixed-term and periodic is one of the first decisions that shapes how manageable your tenancy will be. Get the structure right from the start, understand the notice rules that apply to your chosen type, and diarise the critical dates so nothing slips through.
If you'd rather hand this over to someone who handles it every day: tenant selection, inspections, maintenance, compliance, and rent collection, we'd be happy to talk. Get in touch with Dave at Propertyscouts Capital City.
About Dave McCarry
Dave McCarry is the owner of Propertyscouts Capital City in Wellington and has worked in property, business, and customer service for many years. Since becoming a property investor in 2009, he has built a strong reputation for practical advice, strong tenant selection, and hands-on property management focused on protecting landlords' investments and maximising returns.