Ending fixed-term tenancy early?

Question from Michelle updated on 22nd December 2013:

We have four signed tenants in a fixed-term tenancy (FFT). One of the tenants feels uncomfortable in the tenancy and wishes to move out (well he is being bullied out). Firstly can he move, based on the FTT agreement? If we as the landlords agree to him moving does the FTT end? Can we not agree to let him go? If we do agree do we draw up a new FTT for the remaining term or do an amendment? Are any changes allowed on either the new agreement or amendment or do the terms have to remain the same? Can the other tenants assign his place in the tenancy on his behalf? There is a negligible financial loss to the remaining tenants as they have a flatmate.

Our expert Alan Bruce responded:

Under the Residential Tenancies Act 1986 (the Act), fixed-term tenancies may be ended early by the agreement of all parties to the tenancy (including all tenants where multiple tenants are involved), or by the Tenancy Tribunal in certain circumstances. Where multiple tenants are party to a tenancy agreement, all tenants are jointly responsible for the tenancy. Difficulties can arise where a fixed-term tenancy involves multiple tenants with one of the tenants wishing to be released from the tenancy early. An agreement would need to be reached with the landlord and all tenants that are party to the tenancy agreement. Assigning the tenancy (or a portion of the tenancy), where one or all of the tenants assign their interest in the tenancy agreement to someone else, may be a good option where the landlord and all tenants agree (if assigning is not prohibited in the tenancy agreement, the landlord cannot unreasonably refuse to allow a tenant to assign the tenancy). Again, all tenants would need to agree to the changes in order to release one party from their obligations under the agreement. Where all parties agree to end a fixed-term tenancy early, or the option of an assignment of the tenancy (or part of the tenancy) is agreed to by all parties, the remaining tenants and landlord can determine whether a new agreement will commence (which may or may not include any changes to the terms and conditions), or whether the original agreement will remain in place with any necessary modifications. Any agreement between the parties should be clearly recorded in writing stating the terms associated with the changes. You (or your tenant) may wish to discuss the possible options of release from the fixed-term tenancy with all tenants to see if a mutual agreement can be reached. To discuss your situation further, or for information about ending a fixed-term tenancy early, you can visit the Ministry of Business, Innovation & Employment’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.

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