Taking on fixed-term tenancy
Question from Meegan updated on 16th October 2012:
I am looking at buying a property which is currently tenanted with a fixed term. Does this mean we have to keep the tenants until the fixed-term ends or do they move out once the property changes hands?
Our expert Megan Martin responded:
Fixed-term tenancies cannot be ended by notice, but can be ended by mutual agreement between both parties. When a property sells, the landlord and tenant can either mutually agree to end the tenancy, or the tenancy will continue on the same terms and conditions with the new owner as the landlord. It is recommended that prospective purchasers in this situation seek independent legal advice to ensure they are fully aware of any obligations they may inherit as part of the sale of a tenanted property, including whether the current fixed-term tenancy will continue once the property sells, and what the existing terms and conditions of the tenancy agreement (that will remain in place) are. To discuss your situation further, or for information about fixed-term tenancies, you can visit the Department’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.