The two options at the end of a Victorian fixed-term lease
Roughly 90 days before any Victorian fixed-term tenancy is due to expire, the landlord has exactly two live options under the Residential Tenancies Act 1997 (Vic). Until 25 November 2025 there were three — the third was an exit, and it is gone. The choice you make in the remaining window sets your rent for the next 12 to 24 months and determines how much notice you will need if you later want the property back.
Option one: offer a new fixed-term agreement, typically 12 or 24 months, usually with a modest rent increase. The renter signs willingly, vacancy risk is removed, and your rent is locked at the new figure. The trade-off is that you cannot raise the rent again during the fixed term.
Option two: let the fixed-term agreement run its course and roll automatically into a periodic tenancy — month to month, no end date, governed by the same RTA 1997. Rent increases remain possible every 12 months on 90 days' notice. You can still issue grounds-based Notices to Vacate (sale with vacant possession, owner or family moving in, demolition or major repair).
What is no longer an option: ending the tenancy because the fixed term ended. The Consumer and Planning Legislation Amendment (Housing Statement Reform) Act 2025 repealed ss 91ZZD and 91ZZDA on 25 November 2025, abolishing the end-of-fixed-term Notice to Vacate. A fixed term that reaches its end date now converts to a periodic tenancy unless both parties agree to a new fixed term or the landlord holds a valid ground. There is no longer any point in a Victorian tenancy at which possession can be recovered without a reason. Any strategy, template or calendar built around the old 90-to-60-day exit window needs to be retired — see our notice to vacate guide for the grounds that remain and what each one requires in evidence.
This guide walks the strategic logic behind the remaining choice, the soft-renewal pricing approach, and the documentation shortcut that turns a lease renewal into a one-page addendum. If you would rather hand the timing and the paperwork to a managed service, our rental property management Melbourne team builds a 90-day renewal calendar for every property under management.
What the 2021 and 2025 reforms did to your renewal leverage
On 29 March 2021, the Andrews government's overhaul of the Residential Tenancies Act 1997 (Vic) brought roughly 130 individual rule changes into force at once. For the lease renewal decision, two of those changes do almost all the work.
First, 'no specified reason' Notices to Vacate were abolished on periodic tenancies. Before March 2021, a Victorian landlord could end a month-to-month tenancy on 120 days' notice without giving any reason at all. After March 2021, every Notice to Vacate must be tied to a specific ground in the Act (rent arrears, damage, danger, sale of property, owner moving in, demolition, etc.), and that ground must be supportable with evidence if the renter challenges the notice at the Victorian Civil and Administrative Tribunal (VCAT).
The 2021 package left one unconditional exit standing — the s 91ZZD 'end of fixed term' notice, servable in a window before a first fixed term expired. On 25 November 2025 that was repealed too, along with s 91ZZDA. The practical effect on a landlord weighing up a renewal is now unambiguous: there is no unconditional exit to preserve, at any stage of any tenancy. Whether the agreement is fixed or periodic, ending it requires a real, evidenced ground. The renewal decision is therefore purely about rent and stability — it no longer buys or forfeits an exit right.
Second, the rent-increase rules were tightened to once every 12 months across both fixed-term and periodic tenancies, and the form of the notice was prescribed. You can no longer raise the rent twice in 18 months under any combination of fixed-term and periodic arrangements, and the renter has an explicit right to apply to Consumer Affairs Victoria for a rent assessment if they consider the increase excessive. These rules apply equally to a fresh fixed-term renewal and a rent review on a rolled-over periodic tenancy.
Where periodic tenancies still hold a small edge is in timing flexibility: on a periodic tenancy you can serve a 90-day Notice of Proposed Rent Increase whenever the 12-month rule has been satisfied, rather than waiting for a fixed-term anniversary.
The renewal window after 25 November 2025: a pricing decision, not an exit
For four and a half years the 90-to-60-day pre-expiry window was the most strategically valuable date in a Victorian landlord's calendar, because it was the last moment at which possession could be recovered without a reason. That is no longer true. With ss 91ZZD and 91ZZDA repealed, the window survives — but its purpose has completely changed.
What the window is now. It is the period in which you decide whether to offer a new fixed term, and at what rent. Two statutory clocks make roughly 90 days the right lead time. A rent increase requires 90 days' written notice (increased from 60 on 25 November 2025), so a renewal priced at a higher rent has to be notified about three months ahead if the new figure is to apply from the day the current term ends. And a renter deciding whether to stay generally wants certainty a couple of months out, before they start looking.
Worked example. A 12-month lease commenced 1 October 2025 and ends 30 September 2026. To have a higher rent apply from 1 October 2026, the Notice of Proposed Rent Increase must be deemed served on or before 2 July 2026 — and if you are posting it, add four business days, so post by roughly 26 June. In the same conversation you offer the new fixed term at that rent. Miss the notice date and you can still renew, but only at the existing rent until a compliant 90-day notice runs its course.
What the window is not. It is not a decision point about whether you can get the property back. Drifting past it no longer forfeits anything except the timing of a rent increase. If you need vacant possession — to sell, to move a family member in, to redevelop — you need one of the remaining grounds, each with a documented factual prerequisite in place before the notice is served, and each now on 90 days' notice. Landlords who bought on the assumption that a fixed term is a reliable path to vacant possession should re-plan on that basis.
The operational implication for a portfolio is that the renewal calendar is still worth running, but it is a revenue calendar rather than a possession calendar. Every property should have a diarised date at roughly 100 days before expiry: check the market rent, decide the offer, and get the notice out in time for it to bite on the anniversary.
The 12-month soft renewal: OptimaRea's default playbook
For roughly 70 per cent of the renewals we process at OptimaRea, the right answer is the 12-month soft renewal: offer the renter a fresh 12-month fixed term with a modest rent increase of $20-$40 per week, presented as a friendly continuation rather than a renegotiation. Most renters sign within 5 business days. The math works for everyone — the landlord locks in a year of rent at a higher figure with zero vacancy risk; the renter avoids the time, money, and emotional cost of moving for the price of a sub-inflation rent bump.
The pricing logic. Comparable-market rent for the property in 2026 is, say, $620 per week, and the renter is currently paying $580. A naive offer of '$620, take it or leave it' is more likely to lose the tenant than a $40 increase — moving costs renters at least $3,000-$4,000 (removalist, bond differential, time off work, utility transfers), so a $40/week bump is structurally cheaper than moving even if a slightly cheaper property is available across the road. A $60-$80 increase, by contrast, starts to feel like a renegotiation and triggers exit thinking. Soft is the operative word.
The pitch. We send a one-page offer letter 100 days before lease expiry: 'Your current lease ends on [date]. We would like to offer a new 12-month lease at $[new rent] per week, beginning [date+1]. The renewal is a simple addendum — please reply by [date+14] to accept.' No legalese, no veiled threat about market rent. Staying is the default; a small rent increase is the only friction.
The documentation shortcut. A lease renewal does not require a brand-new agreement. The lawful way to renew a Victorian residential lease is a one-page Schedule 1 addendum that extends the term and varies the rent, executed by both parties. The original agreement remains the operative document; the addendum simply amends the end date and the rent figure. This saves both parties the burden of a 30-page re-signing exercise. Our lease management guide covers the exact addendum template we use.
The escalation path. If the renter pushes back on the rent, the property manager has $10-$15/week of headroom to negotiate down. If the renter asks for 18 or 24 months instead of 12, the answer is almost always yes — longer fixed terms reduce vacancy risk and lock in a known rent stream, which is worth more than the optionality of an annual review. The only common reason to refuse a longer term is if the landlord is planning to sell in the next 12 months.
The 'let it roll periodic' approach: when it makes sense
The opposite default — letting the fixed term expire and roll into a periodic tenancy with no renewal action at all — is the right call in a minority of cases, but the cases where it is right tend to be high-stakes. Roughly 15 per cent of OptimaRea managed properties roll periodic by deliberate choice each year.
The case for rolling periodic. Once the agreement is periodic, the landlord can serve a 90-day Notice of Proposed Rent Increase whenever the 12-month rule has been satisfied — no waiting for the next fixed-term anniversary. For a landlord in a rapidly rising rental market with month-by-month comparable data, this preserves the option to push rent up as soon as the market moves. The renter has the same statutory protections they had during the fixed term; they have not 'lost rights' by rolling periodic. The landlord can still serve specific-ground Notices to Vacate (sale, owner moving in, demolition) on 90 days' notice.
The cases where it makes sense. First, where the landlord is genuinely planning to sell within 6-12 months and wants flexibility on the listing date. Second, where the rental market is rising fast and the landlord wants to push rent up via 90-day notices rather than locking in a 12-month figure. Third, where the renter has begun to show small signs of being a difficult tenant and the landlord wants to avoid committing to another 12 months at a fixed rent.
The cost of rolling periodic. Since the repeal of s 91ZZD this no longer includes the loss of an exit right — there is no longer one to lose, on either path. What remains is that mortgage refinance applications also look modestly weaker against a periodic tenancy than a fixed term. And in a falling rental market, the landlord has given up the locked-in rent that a fixed-term renewal would have provided.
The documentation. A fixed term that runs to its end date with no further action automatically becomes a periodic tenancy on the day after the end date — no paperwork is required from either party. The same lease document remains operative, the bond stays in place at the Residential Tenancies Bond Authority (RTBA), and the rent continues at the same frequency. The only mechanical change is the absence of an end date.
Pricing a renewal correctly: market rent, the 12-month rule, and the CAV assessment risk
The single most consequential decision in a lease renewal is the rent figure. Set it too low and you give up a year of recoverable rent — you cannot retroactively raise the rent on a fixed term once signed. Set it too high and you lose the tenant; a vacancy of just 2 weeks at $600/week eats $1,200, which is roughly a year of a $25/week renewal increase. The break-even math punishes both directions.
The data source. The best comparable rent figure in 2026 comes from a combination of CoreLogic RP Data, realestate.com.au and Domain rent-history search for the suburb in the last 90 days, and the property manager's own lettings data for similar properties under management. We benchmark against the median weekly rent for comparable properties in the same suburb on Domain Group's quarterly rental report, then adjust for property-specific factors (recent renovations, parking, energy efficiency, condition).
The 12-month rule. Under the RTA 1997, rent can only be increased once in any 12-month period, regardless of whether the tenancy is fixed-term or periodic. A renewal offer that includes a rent increase counts as that 12-month event. If you raised the rent 8 months ago and want to renew with a further increase now, you cannot — wait until the 12-month anniversary of the last increase before serving a fresh Notice of Proposed Rent Increase.
The Notice of Proposed Rent Increase. On a periodic tenancy, the increase mechanism is the formal Notice of Proposed Rent Increase served on the prescribed Consumer Affairs Victoria form, with 90 days' notice (increased from 60 on 25 November 2025). On a fixed-term renewal, the increase is built into the renewal offer itself and embodied in the addendum — no separate Notice is required. The renter has 30 days from receipt to apply to Consumer Affairs Victoria for a rent assessment if they consider the increase excessive.
The excessive-rent-increase risk. CAV's Director of Consumer Affairs has the power, on a renter application, to investigate a proposed rent increase and refer it to VCAT for a binding determination. In practice, increases of less than 8 per cent of the previous rent rarely attract a referral; increases above 12 per cent in a single step are routinely investigated. The OptimaRea soft renewal of $20-$40/week — typically 3-7 per cent of the previous rent — sits comfortably within the safe zone. Where the property has been substantially improved since the previous rent was set, an increase of 10-15 per cent is often supportable with photographic and invoice evidence.
When the renter asks for 24 months: should you say yes?
Roughly one in five renters who accept a 12-month renewal offer comes back with a counter-offer asking for an 18 or 24-month fixed term. The renter motivation is straightforward: stability, certainty about the family budget for school years, no risk of a rent increase mid-period. The right landlord answer is almost always yes, with two specific carve-outs.
The case for saying yes. Vacancy risk is the largest single cost in residential investment. A 2-week vacancy at $600/week costs $1,200; a 4-week vacancy costs $2,400. Removing that risk for an additional 12 months is worth $1,200-$2,400 of expected-value preservation. The locked-in rent also protects against a falling rental market (rare but real — Melbourne 2020 was a 12 per cent fall). The renter is signalling that they want to stay long-term, which correlates with care for the property and prompt payment. And the landlord can build a rent-step into the longer agreement (e.g. $600/week for year 1, $620/week for year 2) if the step-up is documented in the addendum, preserving rent growth even within the longer fixed term.
The two situations where you should say no. First, if you are genuinely planning to sell within 12-24 months, a 24-month fixed term will collide with the sale timeline — a 'vacant possession' sale contract requires a Notice to Vacate that the active fixed term may foreclose. Second, if the renter has a history of slow rent payment or minor breaches and you want optionality on a future grounds-based exit, a longer fixed term increases the duration of that risk. In both cases, counter-offer with a 12-month fixed term and explain that 'we typically renew in 12-month cycles.'
The step-up clause. A 24-month renewal with a built-in rent step ($620/week for the first 12 months, $640/week for the second 12 months) needs only a single sentence in the addendum specifying the increase date upfront. This preserves landlord rent growth while giving the renter the stability they want. It does not violate the 12-month rule because the increase date is specified in the lease at the time of signing — a different mechanism from a unilateral mid-lease rent increase. Tenants Victoria accepts this clause type as compliant when the step is specified upfront.
When OptimaRea manages the renewal cycle for a landlord client
Every managed property at OptimaRea has a renewal calendar entry exactly 100 days before its current fixed-term lease expires. The property manager runs comparable-rent analysis, drafts a soft renewal offer, and walks the landlord through the renew / roll decision in a 15-minute call. The landlord retains decision authority on every property; we handle the timing, the paperwork, and the negotiation.
Where a landlord needs the property back, the s 91ZZD end-of-fixed-term route no longer exists — it was repealed on 25 November 2025. We work backwards from the ground that will actually apply (sale with vacant possession, owner or family occupation, demolition or major repair), assemble the evidence that ground requires before anything is served, and then run the 90-day notice with a Director co-signing. Where possession is not achievable, we say so early rather than after a dismissed VCAT application, and we follow up with a handover plan that minimises vacancy.
For renewals, we send the offer letter 100 days before expiry, follow up at 80 days, and have a signed addendum on file by 60 days. If the renter wants 24 months instead of 12, we run the sell-timing check with the landlord before agreeing. For roll-periodic decisions, we diarise the rent review so the 90-day notice is served as soon as the 12-month rule permits.
If you are a Melbourne landlord with a fixed-term lease approaching expiry — or you have already let one roll periodic and want to know what your remaining options are — contact our property management team on (03) 9015 4080 or property@optimarea.com.au. We will review the lease, identify which strategic options are still open, and present the data-driven renewal recommendation alongside the comparable-rent benchmark for your suburb.