When most people hear the word lease, they assume it means something long-term. After all, isn’t every lease fixed? that’s not always the case. In real estate, there are two main types of leases: fixed-term and month-to-month (also called periodic leases). Today, we’re focusing on fixed-term leases — the ones that lock in a set start and end date. So, what is a fixed-term lease?
In this article, we’ll define it, break down its key features, see how it compares to month-to-month agreements, look at what happens when the term ends, and talk about the role property managers play in the process. Let’s get into it.
What is a Fixed Term Lease in Real Estate?
For now, let’s start by breaking down what a fixed-term lease actually is. Our Northern Virginia property managers can tell you that a fixed-term lease means you’re signing up for a rental agreement with very specific start and end dates. Everything is clearly laid out in advance — from six months to twelve months, or even longer. You know exactly how long you’ll be staying from day one. The commitment is set, which brings a level of stability for both parties.
During this period, the tenant occupies the property with the understanding that the fixed lease won’t automatically renew. Instead, unless the lease or landlord specifies otherwise, it typically will convert into a month-to-month lease.
Even though you’re locked in for the full term, most fixed-term leases still break down payments month by month. So, while you usually don’t pay everything upfront, the financial expectations for the entire term are clear from the moment you sign.
For many renters, one of the biggest advantages is predictability. With a fixed-term lease, you don’t have to worry about sudden changes or unexpected notice periods. You know where you’ll be living — and how much you’ll be paying — until the lease officially ends.
Key Features of a Fixed Term Lease
Let’s take a closer look at what sets fixed-term leases apart. Keep in mind that most of these points apply to how leases work in many states, although some details may vary depending on local laws and regulations. Here are the key features:
Predictable Stability
Fixed-term leases usually last anywhere from six months to several years. Once you sign, you know exactly how long you’ll have the home. So, you can have your plans laid out ahead of you for months.
You’re Restricted on When You Can Break Your Lease
Usually, you can’t casually break a fixed-term lease early, with very few exceptions. For example, you may be able to break it if both the tenant and the landlord agree, or there is a serious legal reason (such as major habitability issues). However, otherwise, you typically will be stuck.
Landlord’s Notice for Non-renewal
If the landlord doesn’t plan to renew the lease when it ends, they’re generally required to provide written notice in advance. In many states, leases must include a notice clause requiring 30, 60, or even 90 days’ written notice if either party decides not to renew at the end of the term. Always check your state and town’s laws for definitive information.
End of Lease Options
Once your term ends, you may have the option to sign a new lease or switch to a month-to-month arrangement, depending on what works best for both parties. This can give you a broader set of options.
Breaking the Rules Can Have Serious Consequences
If you fail to comply with the terms of the lease — such as not paying the rent or committing serious lease violations — there likely will be consequences. For example, you may face eviction, additional fees, or other legal actions. So, you always have to comply with the terms.
Fixed Term Lease vs Month-to-Month Lease
If you’re trying to figure out which lease option suits your situation, this simple comparison lays out the key differences to help you decide which arrangement might work best for you.
Feature | Fixed-Term Lease | Month-to-Month Lease |
| Lease Length | Set start and end dates (e.g., 6 or 12 months) | Automatically renews every month |
| Flexibility | Less flexible; hard to end early | High flexibility; can end with proper notice |
| Stability | Stable, predictable rent and duration | Less predictable; terms can change more often |
| Rent Increases | Rent usually stays the same during lease term | Rent can increase with proper notice |
| Early Termination | Requires mutual agreement or legal cause | Can end with 30 days’ notice (in most cases, unless lease or laws say otherwise) |
| Landlord Notice for Non-Renewal | Typically, at least 30 days before lease ends (depends on state and local laws) | Usually 30 days’ notice anytime (depends on state and local laws) |
| Negotiation Opportunities | Terms locked in after signing | Easier to renegotiate during tenancy |
| Ideal For | Tenants wanting long-term stability | Tenants needing short-term flexibility |
FAQs
Can a Fixed Term Lease Be Broken Early?
Generally, a fixed-term lease can’t be broken early unless both the tenant and landlord agree, or there’s a valid legal reason, such as major habitability issues. Otherwise, breaking a lease may lead to financial penalties or legal consequences.
What Happens at the End of a Fixed Term Lease?
When a fixed-term lease ends, a few things can happen depending on what both the tenant and landlord decide:
- Renew the lease: Both parties can agree to sign a new lease for an additional fixed term.
- Switch to month-to-month: If no new lease is signed, many agreements automatically convert to a month-to-month basis, allowing both parties to have more flexibility.
- Move out: If either side decides not to continue, the tenant moves out as scheduled.
It’s always a good idea for the tenant and landlord to talk things through before the lease ends, so nobody’s caught off guard at the last minute.
Common Issues with Fixed Term Leases
While fixed-term leases offer stability, they’re not always perfect for every situation. Here are a few common challenges:
- Limited flexibility: Life changes happen — job moves, family changes, or unexpected situations may make it hard to stay for the full term.
- Early termination penalties: Breaking the lease early can result in fees or legal consequences unless both parties agree to end it.
- Locked-in rent: While stability is nice, tenants can’t usually renegotiate rent during the lease term — even if market prices drop.
- Lease-end uncertainty: If the landlord chooses not to renew, tenants may need to find new housing sooner than they expected.
Need a Fixed-Term Lease That Works for You? We Can Help!
Fixed-term leases establish a rental agreement with specific start and end dates, offering predictability and stability for both landlords and tenants. Unlike month-to-month leases, early termination is generally limited, and both parties are committed to the agreed-upon duration and financial terms.
Meanwhile, if you’re in need of a new lease, we’re here to help. Our team of property management professionals can handle the heavy lifting so you don’t have to: drafting leases that protect your rights, coordinating maintenance and repairs, addressing questions and concerns, and more. Look at our listings today to get started!
