What is the primary difference between a fixed-term lease and a periodic lease?

A fixed-term lease is characterized by a specific duration, such as one year or six months, in which the terms of tenancy are agreed upon and are not subject to change until the lease expires. At the end of this period, the lease does not automatically renew, and the tenant must vacate or negotiate a new lease. In contrast, a periodic lease typically operates on a recurring basis—monthly or weekly—and is designed to renew automatically after each period unless either party provides notice to terminate.

This fundamental difference is crucial for understanding the implications for both tenants and landlords. With a fixed-term lease, both parties have security in knowing the duration of the agreement, while periodic leases offer flexibility, allowing tenants to continue occupying the property without the need to renegotiate each time. Knowing this distinction helps individuals manage their rental arrangements according to their needs and preferences.

Other options do not accurately capture the essential characteristics defining fixed-term and periodic leases, as they misinterpret the nature of deposits, alterations to property, and durations associated with these types of agreements.