Breaking fixed term contract
Question from Elizabeth updated on 29th October 2015:
My tenant has given notice to leave the property shortly, but has signed a fixed term tenancy agreement until Feb 2016.
I realise I can agree to this or not. I don't want to be difficult as she has a genuine reason for leaving, but I wonder if it would be considered reasonable for me to ask for a month's rental for inconvenience?
Our expert Alan Bruce responded:
Under the Residential Tenancies Act, 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. Once a suitable replacement for the tenant has been found, the obligations of the departing tenant(s) continue until the day the assignment takes effect. This includes responsibility for paying the rent as well as anything that happens 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 costs and credit check fees.
The Ministry has information on its website for parties who want to end their fixed term tenancy before the agreed end date. It can be found at www.tenancy.govt.nz/ending-a-fixed-term-early.
If you have any further questions about the assignment process you can call 0800 TENANCY (0800 836 262) between 8.00am-5.30pm Monday to Friday to speak with a member of our Tenancy Advice team. You can also visit our website at www.tenancy.govt.nz.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.