The process of ending a tenancy, whether a fixed-term lease or a periodic lease, can be troublesome if the property manager or owner is unaware of the termination rules. Both lease types have specific requirements to meet the qualifications of delivering a proper termination notice. 

Failure to comply with the notice periods could result in financial loss and further delay the owner intending to sell or take back their property.

This article aims to provide some practice tips and reminders for understanding the rules around terminating a lease agreement. When working with a tenant-occupied property, it is important for all REALTORS^®, property managers and brokers to understand the rules to serve their clients best.

Fixed-term tenancy termination

A fixed-term tenancy ends on a specified day outlined in the rental agreement. For example, if a lease agreement starts on January 1 and ends on December 31, the tenancy will automatically end on December 31.

Unless the tenant and landlord make other arrangements (lease renewal), the tenant must move out by noon on December 31. The lease agreement can be terminated early if it is agreed upon by both the landlord and tenant (recommended to be done in writing).

Neither the landlord nor the tenant needs to provide notice that they will not be renewing the fixed-term lease agreement. However, the best practice for handling a fixed-term lease expiring is for landlords and tenants to communicate their decision before the lease end date.

This communication fosters a good relationship and helps the landlord and tenant to plan their next steps. There is no set time frame for this conversation to happen, but it is strongly recommended that you start this conversation with the tenant a few months before the lease naturally ends.

Important note: A fixed-term lease agreement cannot be terminated early without the tenant’s consent. If the landlord wants to terminate the lease agreement before the end date, the tenant must agree in writing to this termination.

This process involves the landlord proposing the early termination, the tenant agreeing to it in writing, and both parties signing the agreement. The tenant can decline the landlord's offer and finish the remaining time in the lease agreement. The landlord does have the ability to negotiate with the tenant. However, this may come with further expenses or loss to the landlord (e.g., rent reductions, moving costs. etc.)

Practice tip: If the landlord intends not to renew the tenancy and wishes to take back possession of the property to sell, try to provide the tenant with as much notice as possible (2-3 months). This will allow the tenant to search for other accommodations and help with a smooth move-out at the end of the term.

Periodic tenancy termination

A periodic tenancy can range in the length of time that the tenant and landlord agree to. This can be as short as a week-to-week tenancy or year-to-year; the most common form of a periodic tenancy is the month-to-month agreement.

All forms of periodic tenancies will vary depending on the vacate notice tenants must receive from the landlord. REALTORS^® and property managers need to understand these types of tenancies and know the notice periods required for taking back property. These dates are important to note as they will affect the possession date for a future buyer.

Grounds for terminating a periodic tenancy:

• Landlord or relative wants to move into the property.
• The landlord has agreed to sell (with waived conditions) the rental property, and the buyer wishes to move in.
• Demolition of rental property.
• The landlord wishes to use or rent the property for non-residential purposes.

Notice period reminders:

Weekly tenancy – 1-week notice period for tenant and landlord.

Monthly tenancy – 1-month notice period for tenants. 3-month notice period for landlords.

Hot tip: Tenants must receive three calendar months' notice to end the lease agreement. Notice must be provided to the tenants before the first of the month. For example, if the tenant is to vacate the property on June 30, notice must be given to the tenant by March 31 as it needs to be a full clear three months. Further, if a three-month notice is given on March 16, the tenant's vacate date is still June 30, not June 16.

Yearly tenancy – 60 days' notice before the last day of the tenancy year for tenants, 90-day notice period before the last day of the tenancy year for landlords.

Practice tip: Although there has been leniency in how property managers have delivered vacate notice to tenants (e.g., via email), it is strongly recommended that a physical copy of the vacate notice is also provided to the tenant(s). This can be done via registered mail or by delivering or posting a copy of the vacate notice to the property. If notice is physically posted to the door, it is recommended that a photo is taken of the posted documents as proof of delivery if the tenant is not home to accept the package.

For further information about the different types of tenancies and notice periods, please visit Service Alberta.

To learn more, check out CREB^®’s Tenancy Act Basics webinar on CREB^®Link.