Skip to main content

Disclaimer: Educational purposes only. Not legal advice. Consult a qualified NZ legal practitioner for your specific circumstances.

SimplifiedLaw.co.nz
tenancy

Terminating a tenancy to sell the property: The 90-day rule

Key Takeaway

Landlords can terminate a periodic tenancy in New Zealand to sell a property by providing 90 days' written notice to the tenant. This requires an unconditional agreement for sale and purchase for the property. Fixed-term tenancies cannot typically be terminated early for this reason unless by mutual agreement.

Terminating a Tenancy to Sell a Property: The 90-Day Rule in New Zealand

In New Zealand, landlords who wish to sell their rental property may, under specific conditions, terminate an existing periodic tenancy (a tenancy agreement that continues indefinitely until either the landlord or tenant gives written notice to end it [Source: Residential Tenancies Act 1986, s 60A]). The law provides a framework for this process, primarily involving a 90-day notice period.

Terminating a Periodic Tenancy for Sale

A landlord (the owner of the property who grants the right to use it to a tenant [Source: Residential Tenancies Act 1986, s 2]) may terminate a periodic tenancy if they have entered into an unconditional agreement for sale and purchase (a binding contract between a buyer and a seller for the sale of a property, where all conditions have been met or waived, making the sale final [Source: Residential Tenancies Act 1986, s 51(2)(d)]) of the premises.

Requirement for an Unconditional Agreement

For a landlord to terminate a periodic tenancy for the purpose of selling the property, there must be a legally binding unconditional agreement for sale and purchase in place. This means that the sale of the property is confirmed and is not subject to any further conditions, such as finance or builder's reports [Source: Residential Tenancies Act 1986, s 51(2)(d)]. Without such an agreement, this specific ground for termination is not available to the landlord.

The 90-Day Notice Period

Once an unconditional agreement for sale and purchase is in place, the landlord is required to give the tenant at least 90 days' written notice to end the tenancy [Source: Residential Tenancies Act 1986, s 51(2)(d)]. The tenancy will terminate on the date specified in the notice, which must be at least 90 days after the notice is given [Source: Residential Tenancies Act 1986, s 51(2)(d)].

Contents of the Notice

The written notice to terminate a tenancy must comply with specific requirements. It must:

  • Be in writing [Source: Residential Tenancies Act 1986, s 52(1)(a)].
  • Specify the date on which the tenancy is to terminate [Source: Residential Tenancies Act 1986, s 52(1)(b)].
  • Be signed by the person giving the notice [Source: Residential Tenancies Act 1986, s 52(1)(c)].
  • Specify the grounds for termination (in this case, an unconditional agreement for sale and purchase of the premises) [Source: Residential Tenancies Act 1986, s 52(2)(a)].

Fixed-Term Tenancies and Property Sale

Generally, a fixed-term tenancy (a tenancy agreement for a specific period of time, with a defined start and end date [Source: Residential Tenancies Act 1986, s 60A]) cannot be terminated by a landlord solely for the purpose of selling the property before its specified end date [Source: Residential Tenancies Act 1986, s 51A]. A fixed-term tenancy provides security of tenure for both the landlord and tenant for the agreed duration.

Early Termination by Mutual Agreement

However, a fixed-term tenancy can be terminated early if both the landlord and the tenant mutually agree in writing to end the tenancy [Source: Residential Tenancies Act 1986, s 51A(1)(a)]. Any such agreement should clearly state the new termination date and any other agreed-upon conditions.

Tenant's Rights and Obligations

Leaving Early After Receiving Notice

If a tenant receives a valid 90-day notice to terminate a periodic tenancy due to the sale of the property, they have the right to give at least 21 days' written notice to the landlord and move out on an earlier date than specified in the landlord's notice [Source: Residential Tenancies Act 1986, s 51(3)]. This allows tenants some flexibility to find new accommodation.

Right to Challenge

If a tenant believes that the landlord's notice to terminate is not valid, for example, if there is no unconditional agreement for sale and purchase, or if proper notice was not given, they have the right to apply to the Tenancy Tribunal (a New Zealand judicial body that resolves disputes between landlords and tenants [Source: Residential Tenancies Act 1986, Part 4]) to challenge the notice [Source: Residential Tenancies Act 1986, s 77]. The Tenancy Tribunal has the authority to make orders regarding the validity of the notice and the continuation or termination of the tenancy [Source: Residential Tenancies Act 1986, s 77(2)(a)].

Role of the Tenancy Tribunal

The Tenancy Tribunal resolves disputes between landlords and tenants, including issues related to tenancy termination. Either party can apply to the Tribunal if they believe their rights or obligations under the tenancy agreement (a legally binding contract between a landlord and a tenant that sets out the terms and conditions of a rental property [Source: Residential Tenancies Act 1986, s 3]) or the Residential Tenancies Act 1986 have been breached [Source: Residential Tenancies Act 1986, s 77]. The Tribunal can order a tenancy to continue, terminate, or award compensation [Source: Residential Tenancies Act 1986, s 77(2)].

When to Seek Independent Legal Advice

Understanding specific rights and obligations under the Residential Tenancies Act 1986 can be complex. In situations involving tenancy termination, particularly when there are disputes, landlords and tenants may wish to consult with Tenancy Services or seek independent legal advice. Community Law Centres (https://communitylaw.org.nz/) offer free legal advice services across New Zealand, which may be a suitable option for those seeking clarification on their specific circumstances.

Key Resources