Breaking a fixed term tenancy?

Question from Hammad updated on 30th June 2011:

I started a one year fixed term tenancy with my current landlord in Feb 2009 which was extended for six months and then again for another six months finishing on March 4th, 2011. I am a NZ permanent resident and my company has recently transferred me to Singapore. I have given my landlord approx. 5-6 weeks notice that I need to leave as I have no choice but to leave NZ. The landlord is not ready to end the agreement and maintains that I will need to pay until March 4th 2011 and that he will try to find new tenants to replace me but no guarantees. I have also paid landlord $99 for a Trademe ad. Your answer to another question states "A fixed term tenancy may only be ended early by mutual agreement between the landlord and the tenant, or by the Tenancy Tribunal in certain circumstances.".... Does job transfer outside NZ come under those special circumstances that can allow breaking a fixed term lease without any penalty to the tenant especially when sufficient (5-6 weeks) notice was given to the landlord?

Our expert Jeff Montgomery responded:

Fixed-term tenancy agreements can be difficult to be released from as they cannot be terminated by notice. As you mentioned a fixed-term can only be ended early by mutual agreement between the landlord or tenant, or by the Tenancy Tribunal in certain circumstances, e.g. where there has been an unforeseen change in one party’s circumstances that will cause financial hardship that outweighs the financial hardship of the other party – the Tenancy Tribunal can also award compensation to the other party in this situation.

Whether your reasons are considered sufficient by the Tenancy Tribunal to terminate the fixed-term will depend on whether the change in your situation is considered unforeseeable, and whether the hardship you will incur will be more than that of the landlord.

If you are unable to reach an agreement with your landlord, you could apply to the Tenancy Tribunal to determine whether your fixed-term tenancy is able to be ended early. Where both parties agree to end the term early, the tenant(s) can still be responsible for rent until a new tenant is found, or the expiry of the fixed-term (whichever is earlier).

To discuss your situation further, or for further information about fixed term tenancies, you can visit the Department of Building and Housing website (www.dbh.govt.nz) or call 0800 TENANCY (0800 836 262).

The Department of Building and Housing provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.

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