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tenancy

How to Terminate a Fixed-Term Tenancy in New Zealand

Key Takeaway

Fixed-term tenancies in NZ automatically end on their specified date. If 90 days or longer, they can convert to a periodic tenancy unless proper notice is given. Early termination requires mutual written agreement or a Tenancy Tribunal order, typically due to severe tenant hardship or a landlord seeking termination for tenant breaches. Assignment or subletting can be alternatives to early termination.

Terminating a Fixed-Term Tenancy in New Zealand

A fixed-term tenancy is a rental agreement for a specific period of time, with a set start and end date [Source: Residential Tenancies Act 1986, s 7]. Understanding how these tenancies end, and the rules around early termination, is crucial for both landlords and tenants in New Zealand.

Automatic End of a Fixed-Term Tenancy

Generally, a fixed-term tenancy automatically ends on the date specified in the tenancy agreement [Source: Residential Tenancies Act 1986, s 60A(1)]. No notice is required from either party for the tenancy to end on this date, unless the tenancy is 90 days or longer and specific notice requirements apply for conversion to a periodic tenancy.

Converting to a Periodic Tenancy

If a fixed-term tenancy is for 90 days or more, and neither the landlord nor the tenant gives notice to prevent its continuation, it will automatically convert into a periodic tenancy at the end of the fixed term [Source: Residential Tenancies Act 1986, s 60A(2)]. A periodic tenancy is a tenancy agreement with no fixed end date, continuing until either the landlord or tenant gives notice to end it [Source: Residential Tenancies Act 1986, s 7].

To prevent this automatic conversion, either party must give notice between 21 and 90 days before the end date of the fixed term [Source: Residential Tenancies Act 1986, s 60A(3)].

  • A tenant does not need to provide a reason for giving notice to prevent the tenancy from continuing [Source: Residential Tenancies Act 1986, s 60A(3)(b)(i)].
  • A landlord must provide a reason for ending the fixed-term tenancy at its conclusion, citing one of the reasons specified in the Residential Tenancies Act 1986 [Source: Residential Tenancies Act 1986, s 60A(3)(b)(ii), s 51(2A)].

Ending a Fixed-Term Tenancy Early by Mutual Agreement

Both the landlord and the tenant can mutually agree in writing to end a fixed-term tenancy early [Source: Residential Tenancies Act 1986, s 60(1)(a)]. This agreement should be clear about the new termination date and any other agreed terms, such as costs or responsibilities.

Ending a Fixed-Term Tenancy Early Due to Tenant Hardship

A tenant may apply to the Tenancy Tribunal for an order to terminate a fixed-term tenancy early on the grounds of severe hardship [Source: Residential Tenancies Act 1986, s 66(1)]. The Tenancy Tribunal is a judicial body that resolves disputes between landlords and tenants in New Zealand [Source: Residential Tenancies Act 1986, Part 5].

For the Tenancy Tribunal to grant such an order, it must be satisfied that:

  • The tenant's hardship would be severe if the tenancy were to continue [Source: Residential Tenancies Act 1986, s 66(2)(a)].
  • The hardship of the tenant would be greater than the hardship the landlord would suffer if the tenancy were terminated [Source: Residential Tenancies Act 1986, s 66(2)(b)].

If the Tribunal grants the termination, it may also order the tenant to pay the landlord reasonable costs, such as rent until a new tenant is found, or re-letting fees [Source: Residential Tenancies Act 1986, s 66(3)].

Landlord Ending a Fixed-Term Tenancy Early

Generally, a landlord cannot unilaterally end a fixed-term tenancy early by giving notice, unless there is a specific breach by the tenant that allows them to apply to the Tenancy Tribunal for termination [Source: Residential Tenancies Act 1986, s 51(1)]. Grounds for a landlord to seek early termination through the Tenancy Tribunal include:

  • Unpaid Rent: If rent is 21 working days in arrears, the landlord may apply to the Tenancy Tribunal for an order to terminate the tenancy [Source: Residential Tenancies Act 1986, s 50, s 51(1)(b)]. For rent that is not 21 working days in arrears, the landlord must give the tenant a 14-day notice to remedy the breach first [Source: Residential Tenancies Act 1986, s 50].
  • Other Breaches: For other breaches of the tenancy agreement (e.g., damage to the property, unlawful use of premises), the landlord must typically give the tenant a 14-day notice to remedy the breach. If the tenant fails to remedy the breach within this period, the landlord may apply to the Tenancy Tribunal for an order to terminate the tenancy [Source: Residential Tenancies Act 1986, s 51(1)(c)].
  • Repeated Anti-Social Behaviour: If a tenant has engaged in three separate instances of anti-social behaviour within a 90-day period, and the landlord has given written notice after each instance, the landlord may apply to the Tenancy Tribunal for an order to terminate the tenancy [Source: Residential Tenancies Act 1986, s 55A, s 51(1)(d)].
  • Assault or Threats: If a tenant has assaulted or threatened to assault the landlord, the landlord's agent, or a neighbour, the landlord may immediately apply to the Tenancy Tribunal for an order to terminate the tenancy [Source: Residential Tenancies Act 1986, s 55B, s 51(1)(d)].

Assignment and Subletting

If a tenant wishes to move out before the end of a fixed-term tenancy, and early termination is not possible, they may consider assigning the tenancy or subletting the premises. Assignment is the transfer of the tenancy agreement from the original tenant to a new tenant, with the landlord's consent [Source: Residential Tenancies Act 1986, s 39]. Subletting is when a tenant rents out all or part of the rental property to another person (the subtenant), with the original tenant remaining responsible to the landlord [Source: Residential Tenancies Act 1986, s 39].

These options are only permissible if the tenancy agreement allows it, and the landlord's written consent is required [Source: Residential Tenancies Act 1986, s 39(1)]. A landlord cannot unreasonably withhold consent to an assignment or subletting [Source: Residential Tenancies Act 1986, s 39(2)].

When to Seek Independent Legal Advice

It is important for individuals facing complex tenancy issues, or who are unsure about their rights and obligations regarding fixed-term tenancy termination, to seek independent legal advice. Community Law Centres across New Zealand offer free legal advice and assistance to those who qualify. Additionally, the Ministry of Business, Innovation and Employment provides guidance on tenancy matters through Tenancy Services.

Key Resources