Landlord declining fixed-term renewal
Question from Andrea updated on 30th October 2013:
I have a fixed-term tenancy expiring April 2014 but I have two rights of renewal. My landlord has advised he wishes to sell the house and that the owner can decline to renew. I thought that our contract was sold with the house including a right to renew, which means a request by us (the tenant) can not be declined? Can a right to renew clause be declined? We have not breached any tenancy agreement and have excellent references.
Our expert Alan Bruce responded:
Under section 60B of the Residential Tenancies Act 1986 (the Act), a tenant who wishes to exercise their right to renew or extend a tenancy must exercise that right by giving the landlord written notice not later than 21 calendar days before the date on which the tenancy would otherwise expire. The Act also states that if the premises are sold, then the new owner of the premises would inherit the current tenancy agreement and be bound to the same terms and conditions contained in the fixed-term agreement you signed with your current landlord. This would include any right of renewal. Fixed term tenancies can only be ended early: By mutual agreement between the landlord and the tenant(s) if the property undergoes a mortgagee sale or in certain circumstances by the Tenancy Tribunal. An application to the Tenancy Tribunal would require your landlord to satisfy the adjudicator that there has been an unforeseen change in their circumstances that will cause them severe hardship if the tenancy is to continue. Their hardship must outweigh any hardship the tenant(s) would suffer, if the tenancy is ended early. The Tenancy Tribunal can consider awarding reasonable compensation to the tenant(s) in this situation. To discuss your situation further you can visit the Ministry of Business, Innovation & Employment’s website (www.dbh.govt.nz), or call 0800 TENANCY (0800 836 262).
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.