Trouble on the horizon?
Question from Mason updated on 10th December 2014:
We are currently in the process of signing up a new tenant. Both reference checks were good, so we have had the tenant sign the a one year fixed term agreement. The tenancy starts shortly but no money has changed hands yet. We have since found out the tenant has recent drug convictions and gang affiliations (through a third party) and also may have had trouble with rent payments two tenancies ago. We have got really cold feet over this one and are not sure how to proceed. We technically do not know of the drug convictions etc so can't bring them up with the tenant. Have you any suggestions on what we can do? Can we stop the tenancy going ahead? Thanks.
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. This also applies where an agreement has been entered into but has not yet commenced, regardless of whether any money has been paid (unless a conditional agreement is on offer).
Fixed term tenancies can only be ended early either by mutual agreement between the landlord and the tenant(s), if the property undergoes a mortgagee sale and in certain circumstances, by the Tenancy Tribunal.
Where a landlord and tenant(s) agree to terminate a fixed term tenancy early (including any terms and conditions agreed to), the details of that agreement should be recorded in writing, preferably on the tenancy agreement. We suggest in any situation where a tenant is in breach of their responsibilities under the Act (e.g. rent arrears), the landlord takes steps quickly to resolve the matter.
Information regarding options available to a landlord under the Act can be viewed on the Ministry of Business, Innovation and Employment’s website at http://www.tenancy.govt.nz/landlords-index
To discuss your situation further, you contact the Ministry on 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.