Tenancy contract breach costs

Question from Craig updated on 10th August 2015:

I had a couple all keen to move into my Hamilton rental property. They signed a fixed term tenancy agreement for one year. After two weeks of delays with bond and advance, they asked for more time. I said sorry but no, I can't wait any longer and that they may be liable for my losses until new tenants are found. 

What is my position here? We lost three weeks rent, re-advertising costs and quite a bit of time chasing them up. Can I claim this from them? What should I do for lost rent, etc?


Our expert Bernard Parker responded:

A signed tenancy agreement is a contract which is binding on both parties. Rent is required to be paid in advance, and the two weeks of delays have already put your tenants in breach of the agreement. If you had no confidence that the tenants would be able to raise the necessary money, then you have been sensible in mitigating the loss by finding a replacement tenant.

You can apply to the Tenancy Tribunal for recovery of lost rent and the re-advertising costs that resulted from the delays. However, you are unlikely to succeed in a claim for your time. That is usually regarded by the Tenancy Tribunal as a normal cost of running a business.

Bernard is principal of Quinovic – Kapiti-Mana. Quinovic's outstanding people and systems provide the most professional, effective and reliable residential property management service in the NZ market for over 30 years.

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