Costs in ending a fixed term early

Question from Scott updated on 22nd January 2020:

If a tenant asks a landloard or their agent to be released early from a fixed term tenancy, and the landloard or their agent agree and will incur costs in doing so, and those costs are agreed by both parties, upon successful termination of the tenancy, can those costs be deducted from the bond if unpaid?

Our expert Jennifer Sykes responded:

Any deductions from the bond must be by mutual consent between landlord and tenant in the first instance. The bond is usually held until the tenant vacates at the end of the tenancy, at which time both landlord and tenant decide on how it will be distributed. They must complete a bond refund form to reflect this and lodge it with Tenancy Services (unless it is a Boarding House bond of one week or less).

When reaching an agreement to release a tenant from a fixed term tenancy early the landlord has the right to recover the costs reasonably incurred from the tenant. Both parties should discuss this and reach such an understanding when negotiating an early end of the tenancy. Where an arrangement has been made the landlord may seek this amount from the bond if it remains unpaid. If the tenant does not agree, then either the landlord or tenant may to apply to the Tenancy Tribunal to have the matter resolved.

For more information on ending a fixed-term early go to tenancy.govt.nz/ending-a-tenancy/ending-a-fixed-term-early. You can also subscribe to our e-newsletter Tenancy Matters here

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.

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