Breaching tenancy
Question from Sabine updated on 7th September 2015:
A prospective tenant signed a 12 month fixed term tenancy agreement. On the day he was supposed to move in he phoned and said he had changed his mind and was not moving into the property. Do I have rights in this case - i.e. can I ask for three weeks rent in lieu of notice? No money had been paid at this stage.
Our expert Alan Bruce responded:
Under the Residential Tenancies Act 1986, a fixed term tenancy cannot be ended by either party giving notice to terminate the contract before the agreed end date. Either party can approach the
other to see if they are agreeable to ending the tenancy agreement by mutual consent. Any agreement should be in writing clearly stating the terms associated with the tenancy ending earlier.
Another option that allows a tenant to exit a fixed term tenancy is a process called ‘assignment’. Assignment is where a tenant wants to leave and have someone else take over their interest in the
tenancy. This includes responsibility for paying the rent up until the day the new tenant takes over, but not after that date. A landlord who agrees to an assignment can recover the actual and reasonable costs associated with the assignment of the agreement from the tenant such as advertising the premises.
In this type of situation, it is recommended that landlords notify their tenants of their continuing obligations under the fixed-term (e.g. rent is still to be paid) and if they will be responsible for any
reasonable costs associated with re-tenanting the property. Where a property is successfully re-tenanted, the tenant’s obligations in respect of their tenancy (e.g. rent payments) would cease the day
prior to a new tenancy commencing.
If a landlord is owed monies, or can demonstrate a loss suffered as a result of the tenant not meeting their responsibilities under the agreement or the Act, they can also apply to the Tenancy Tribunal for a court-enforceable order.
If you need any further assistance or advice please visit our website: www.tenancy.govt.nz or call our Tenancy Advice line on 0800 TENANCY (0800 836 262) Monday to Friday between 8am and 5.30pm.
The Ministry of Business, Innovation and Employment provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.