Early return

Question from Peter updated on 31st January 2013:

We let our property through a property manager as we are overseas. When we let the property we signed an agreement with the property manger that after one year we only had to give a months notice (contract signed). We did say that we could be away up to two years. But have decided to come back after one and have found that the manager has signed a fixed-term lease for two years with the tenants and that we can't break it. The tenants have been no problem and don't want to move, they are within there rights to stay until the end of the contract they signed with the property manager. Who is in the wrong? What can we do? We feel that we have been misled by the property manager signing an agreement for one year and them signing a contract for two years. I realise that we can give the property manager notice but this will only save us their fees on our return to New Zealand. We will have to rent somewhere else and not return to our home. Can we ask for compensation?

Our expert Alan Bruce responded:

The Residential Tenancies Act 1986 (the Act) covers the relationship between a landlord (including an agent of a landlord) and a tenant(s). It does not cover the relationship between a property owner and their property manager. I suggest that you seek independent legal advice regarding any concerns relating to your arrangement with your property manager. Under the Act a fixed term tenancy can not be terminated by notice by either party. A fixed term tenancy can only be ended early by mutual agreement between the landlord and 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). I suggest you discuss the matter with your tenant(s) to see if you can reach an agreement to end the tenancy early. The details of any agreement should be recorded in writing, and preferably attached to the tenancy agreement. To discuss your situation further, or for further information about fixed term tenancies, you can visit the Ministry of Business, Innovation and Employment 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.

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