What is the key distinction between a fixed-term lease and a periodic lease?

The key distinction between a fixed-term lease and a periodic lease lies in the nature of their duration and expiration. Fixed-term leases are characterized by having specific start and end dates. This means that both the landlord and tenant agree on a lease duration—for example, a one-year lease starting on January 1 and ending on December 31. Once the end date is reached, the lease automatically terminates unless both parties agree to renew or extend the lease.

Conversely, periodic leases do not have a specific end date; instead, they continue to renew automatically at set intervals, such as month-to-month or week-to-week, until either party provides notice to terminate. This distinction is crucial in lease negotiations and management, as it affects both the stability and flexibility of rental agreements.

Understanding this fundamental difference allows tenants and landlords to make informed decisions regarding the type of lease that best suits their needs and circumstances. Other options do not accurately represent these essential characteristics of fixed-term or periodic leases.