Terminating a Tenancy

July 2022

Reading Time: 5 Minutes

Fixed-Term Tenancies, Periodic Tenancies and Notice Period Changes

In February 2021 the rules around fixed-term tenancies changed. Under the new rules, all tenancies signed from 11 February 2021 automatically become periodic tenancies once the fixed-term has ended. Landlords can also no longer end a periodic tenancy without a reason.

Understanding the new rules can seem complicated. In this article we look at what periodic and fixed term tenancies are, unpack the updated notice period requirements and discuss options for continuing fixed-term tenancies. We also look at the acceptable reasons for a landlord to end a tenancy.

What is a Fixed-Term Tenancy?

A fixed-term tenancy agreement lasts for a set amount of time, for example a year. However, there is no minimum or maximum length requirement.

A fixed term tenancy that was signed after 11 February 2021 will now automatically become periodic once the fixed term is completed.  There are, however, some exceptions to this as discussed below.

What is a Short Fixed-Term Tenancy?

If a fixed-term tenancy is 90 days or less, it is known as a short fixed-term tenancy. In this case it does not become periodic when the term ends.

If the landlord and tenant agree in writing not to extend the tenancy beyond 90 days, the following rules do not apply:

  • rules about market rent
  • rules about increasing the rent after making improvements to the property
  • rules on giving notice to end the tenancy.

If the tenancy does extend beyond 90 days, all rules will apply as usual. A short fixed-term tenancy cannot be used as a trial period, or as a device to avoid a fixed term tenancy becoming periodic.

What is a Periodic Tenancy?

A periodic tenancy is a tenancy agreement with no specified end date.

Read more about Fixed-Term and Periodic Tenancies.

What If the Tenant Doesn't Want a Periodic Tenancy?

If the tenant would prefer to continue with a fixed-term tenancy this is possible, but they must give 20 days' notice before the fixed term expires.

What If Both Parties Prefer a Fixed-Term Tenancy?

If both landlord and tenant are in agreement, it is possible for the tenancy to be extended for a further fixed term. The agreement must be in writing and signed by both parties.

Can You End a Fixed-Term Tenancy Early?

Fixed-term tenancies can only be terminated prior to the end of the tenancy if the tenants and the landlord agree. From 11 February 2021, landlords have also been required to consider all requests from tenants to assign the tenancy to replacement tenants. Landlords cannot decline unreasonably.

There are grounds for landlords to terminate fixed-term tenancies under very specific circumstances only (see Other Circumstances Where Landlords Can End Tenancies at the end of this article).

Ending Periodic Tenancies

A periodic tenancy can be ended by either party giving notice; however, landlords can no longer issue a ‘no cause’ termination notice.

If a tenant wishes to end a periodic tenancy, they must give at least 28 days’ written notice, unless the landlord agrees to a shorter time. If there is a group of tenants named on the tenancy agreement, and one of the tenants gives the landlord written notice, this ends the tenancy for all the tenants.

If a landlord wishes to end a periodic tenancy, their reasons for termination must fit strict criteria. The criteria and updated notice periods from February 2021 are shown in the chart below.

 

Reason for Termination PREVIOUS
NOTICE PERIOD
CURRENT NOTICE PERIOD (FROM 11 FEB 2021)
UPDATED EXISTING REASONS
Owner Moving In 42 days 63 days
The owner or a member of the owner’s family is going to live in the property within 90 days after termination date, for at least 90 days
Employee Accommodation
The property is normally used as employee accommodation and is needed again for that purpose (this must be stated in the tenancy agreement)
Sale of Property 42 days 90 days
The owner is putting the property on the market within 90 days after termination date
The property has been sold and the new buyer doesn’t want tenants.


NEW REASONS
Changes to the Property  N/A (new)  90 days
The property was bought for the use of nearby land for a business activity and is required to be vacant for that purpose (this must be stated in the tenancy agreement)
The property is to be converted into commercial premises for at least 90 days
Extensive renovations are to be carried out that would make it impractical for the tenant to live there (the landlord must take steps to begin this work within 90 days after termination date)
The property is to be demolished (the landlord must take steps to begin demolition within 90 days after termination date)


Table source: www.tenancy.govt.nz

Other Circumstances Where Landlords Can End Tenancies

There are some other acceptable reasons for landlords to end tenancies, as detailed in the Residential Tenancies Act. These include:

  • A landlord can apply to the Tenancy Tribunal to end a periodic tenancy on the basis of anti-social behaviour if they have issued three notices in a 90-day period.
  • A landlord can apply to the Tenancy Tribunal to end a periodic tenancy if a tenant was five or more working days late with their rent payment on three separate occasions over a 90-day period.

NB: In both of the above situations the Tenancy Tribunal has the power to order the ending of the tenancy, but the ending of the tenancy is not automatic on application – the Tribunal must hear the matter and make a decision supporting the application to terminate before any notice can be given. 

Under clauses written into the RTA in Feb 2021, but not yet in force (as at July 2022) pending drafting and approval of regulations: 

  • Fourteen days’ notice can be given where the tenant has physically assaulted the landlord or their family or agent, and the Police have laid a charge.
  • Tenants who are experiencing domestic/family violence can withdraw from a tenancy by giving two days’ notice, so long as they provide appropriate evidence.

Need Further Advice?

Keeping up to date with the law and how it affects you as a landlord can be difficult. If you’d like some further advice on tenancy agreements or have a general enquiry, contact our Property Management team on pm@crockers.co.nz or call for a chat on 09 623 5952. We look forward to hearing from you!

 

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