Tenant moving overseas

Question from Moon updated on 10th August 2015:

I just received an email from my property manager saying that my tenant will go overseas and end the tenancy before the date written on the contract. I'm thinking of applying to the Tenancy Tribunal over this, but I guess it will be hard to collect the loss once the tenant leaves the country. The property manager also informed me that he tried to find another tenant but couldn't. What can I do?

Our expert Alan Bruce responded:

Under the Residential Tenancies Act 1986 (the Act), a fixed term tenancy cannot be ended by either party giving notice to terminate the contract before the agreed end date. Fixed term tenancies can only be ended early: 

• by mutual agreement between the landlord and the tenant(s)

• if the property undergoes a mortgagee sale

• in certain circumstances, by the Tenancy Tribunal.

If a landlord and tenant(s) agree to terminate a fixed term tenancy early (including any terms and conditions agreed to), where the property is managed by an agent on behalf of the landlord (e.g. a property manager), any agreement that is reached between the property manager and the tenant regarding ending a Fixed Term tenancy early would apply. Where a property manager has agreed to end the fixed term early once a new tenant is found, the tenant may continue to be held liable for the tenancy until these terms are met. If a tenant does not comply with the terms of an agreement to end the fixed term early, the landlord could seek a resolution through the Tenancy Tribunal. If the tenancy agreement does not prohibit assigning of the tenancy (e.g. finding a new tenant to take over the remainder of the tenancy), the landlord cannot attach any unreasonable conditions to the assignment (including unreasonably declining a potential tenant).

Service of documents relating to Tenancy Tribunal enforcement actions can only be served on a party at an address in New Zealand. Where a debtor is overseas, parties may wish to discuss if any other options are available to them with a lawyer or debt collection agency. 

Further information regarding the enforcement process can be viewed on the Ministry of Justice’s website at http://www.justice.govt.nz/fines/civil-debt/collecting-your-civil-debt. Information regarding Fixed Term tenancies and information on the Tenancy Tribunal process can be viewed on the Ministry of Business, Innovation & Employment’s website at http://www.tenancy.govt.nz. To discuss your situation further, you contact the Ministry on 0800 TENANCY (0800 836 262) between 8.00am – 5.30pm Monday to Friday.

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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