How to end or “terminate” a tenancy agreement

How do you terminate a rental agreement?

How to end or terminate a tenancy agreement in NZ

This is a very relevant question and the answer is of interest to both landlords and tenants.

Obviously at the time of entering the rental agreement, tenants intend to stay for a specific time. However, the future is never predictable. Tenants may change jobs and need to move houses. Owners and landlords may decide to sell their rental property and need to sell it vacant.

 

Can you terminate a rental agreement?

This is a very relevant question and the answer is of interest to both landlords and tenants. Obviously at the time of entering the rental agreement, tenants intend to stay for a specific time. However, the future is never predictable. Tenants may change jobs and need to move houses. Owners and landlords may decide to sell their rental property and need to sell it vacant.

What happens in these situations?

The answer can be found by referring to the Residential Tenancies Act. Yes! There is legislation in New Zealand that governs tenancies to protect the rights of landlords and tenants.

Firstly, there are 2 types of tenancies:

1. Periodic tenancy and

2. Fixed term tenancy.

Fixed term tenancy

Under a fixed term tenancy, the rental contract states the dates that the tenancy starts and ends. In this case, the rental agreement can only be ended if both the landlord and the tenant agrees. As always, agreements have to be in writing.

If a tenant needs to leave the property early under the fixed term tenancy, the landlord has the right to charge a fee for breaking the tenancy agreement early. The fee has to be fair and may be something like one or two weeks rent. This is justified because it takes about one to two weeks to clean up the property and get it rented again.

Periodic tenancy

Under a periodic tenancy, there is no agreed ending date for the tenancy agreementThis means the tenant may continue to rent the property until one of the parties (either landlord or tenant) give notice to end the tenancy agreement. . In terms, this is called “terminating” the tenancy agreement.

There is a minimum notice period required depending on the situation giving rise to the termination. This is how it works:

If the tenant wants to terminate the tenancy contract, “the minimum period of notice shall be 21 days”. This means you have to notify the landlord 3 weeks in advance that you are going to end the tenancy. So if you want to end the tenancy by 30 May, you need to notify the landlord on 8th May. This gives the landlord three weeks to find a tenant.

However, if the landlord wants to end the tenancy agreement, the minimum period of notice depends on the reason for ending the tenancy:

If the landlord wants to

live in the house

rent it to his/her staff

sell it as a vacant possession (ie with no tenant in the house),

then the landlord has to give a minimum of 42 days notice to the tenant.

For any other reason (such as repairing the house), the landlord has to give the tenant at least 90 days notice.

The Residential Tenancies Act requires the following:

The notice has to be in writing (so you can’t just ring the landlord and tell him you want to end the tenancy)

The notice must clearly state the address of the property and the date you will end the tenancy

Has to be signed by the person giving the notice. If the landlord writes the notice, the landlord has to sign it before giving it to the tenant. IF the tenant is writing the notice, the tenant has to sign it before giving it to the landlord.

There is an additional requirement in the case where the the tenant is giving less than 90 days notice. In that case, the tenant should state the reason for ending the tenancy.

What happens in these situations?

The answer can be found by referring to the Residential Tenancies Act. Yes! There is legislation in New Zealand that governs tenancies to protect the rights of landlords and tenants. You will already be familiar with this Act if you subscribe to my newsletter.

Firstly, there are 2 types of tenancies:

1. Periodic tenancy and,
2. Fixed term tenancy.

Fixed term tenancy

Under a fixed term tenancy, the rental contract states the dates that the tenancy starts and ends. In this case, the rental agreement can only be ended if both the landlord and the tenant agrees. As always, agreements have to be in writing.

If a tenant needs to leave the property early under the fixed term tenancy, the landlord has the right to charge a fee for breaking the tenancy agreement early. The fee has to be fair and may be something like one or two weeks rent. This is justified because it takes about one to two weeks to clean up the property and get it rented again.
Periodic tenancy

Under a periodic tenancy, there is no agreed ending date for the tenancy agreementThis means the tenant may continue to rent the property until one of the parties (either landlord or tenant) give notice to end the tenancy agreement. . In terms, this is called “terminating” the tenancy agreement.

There is a minimum notice period required depending on the situation giving rise to the termination. This is how it works:

If the tenant wants to terminate the tenancy contract, “the minimum period of notice shall be 21 days”.

This means you have to notify the landlord 3 weeks in advance that you are going to end the tenancy. So if you want to end the tenancy by 30 May, you need to notify the landlord on 8th May. This gives the landlord three weeks to find a tenant.

 If the landlord wants to end the tenancy agreement, the minimum period of notice depends on the reason for ending the tenancy.

If the landlord wants to
1. live in the house, or
2. rent it to his/her staff, or
3. sell it as a vacant possession (ie with no tenant in the house),

then the landlord has to give a minimum of 42 days notice to the tenant.

For any other reason (such as repairing the house), the landlord has to give the tenant at least 90 days notice.

The Residential Tenancies Act requires the following:

  •  The notice has to be in writing (so you can’t just ring the landlord and tell him you want to end the tenancy)
  • The notice must clearly state the address of the property and the date you will end the tenancy
  • Has to be signed by the person giving the notice. If the landlord writes the notice, the landlord has to sign it before giving it to the tenant. IF the tenant is writing the notice, the tenant has to sign it before giving it to the landlord.
  • There is an additional requirement in the case where the the tenant is giving less than 90 days notice. In that case, the tenant should state the reason for ending the tenancy.

Remember if you are unsure, you can always check with Tenancy Services on 0800 836 262.

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