Tenancy Tribunal Reduces Fixed Term Due to Unforeseen Circumstances

OUTCOME: Allowed

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[2026] NZTT 5458812

TENANCY TRIBUNAL AT REMOTE LOCATION | TE TARAIPIUNARA RETIHANGA

APPLICANT: [redacted]

Tenant

RESPONDENT: [redacted]

Landlord

TENANCY ADDRESS: Room 3, Unit/[ADDRESS], [POSTCODE]

ORDER

1. The fixed term tenancy is hereby reduced and ends on 7 March 2026.

2. The [COMPANY] is to pay the bond of $840.00 to the parties as follows:

$800.00 (being rent arrears to 6 June 2026) to [RESPONDENT]

$40.00 to [APPELLANT]

3. The remainder of the tenant’s and the landlord’s claims are dismissed.

Reasons:

1. Both parties attended the hearing.

2. This is a fixed term tenancy which commenced on 8 February 2026 and expires on 30 January 2027. The tenant seeks to cancel and/or reduce the fixed term tenancy. The landlord seeks to uphold the fixed term tenancy; the landlord sought rent arrears against the tenant.

3. The tenant rented the premises to live while studying at Canterbury University.

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4. On 4 March 2026, the tenant informed the landlord that he has cancelled his course of study due to personal reasons and will be returning to his home country in India on 7 March 2026.

5. The Tribunal may reduce a fixed term tenancy where:

a. there has been an unforeseen change in the applicant’s circumstances; and

b. there would be severe hardship to the applicant if the term is not reduced; and

c. the applicant’s hardship would be greater than the hardship to the other party if the term is reduced. See section 66(1) Residential Tenancies Act 1986.

6. There has been an unforeseen change in the tenant's circumstances. While the tenant was in control of his decision to continue with his studies nor not, I do not think that the tenant had deliberately cancelled his studies just in order to renege on the terms of the tenancy.

7. The tenant’s personal reasons for quitting his course very early on meant that he had to leave the country immediately after notifying the university of his withdrawal from the course. The tenant is back home in India since 7 March and has handed back the keys and vacated the apartment on that date. The tenant will not be returning to New Zealand in the foreseeable future.

8. I consider that the cumulative effect of the above facts meant that there has been an unforeseen change in the tenant's circumstances which falls within the context of section 66(1) of the Residential Tenancies Act 1986 (‘the Act’).

9. The tenants would suffer severe hardship if the term of the tenancy were not reduced in that he will be expected to continue paying rent for an accommodation which he is no longer residing for the course of study which he has already cancelled/withdrew from.

10. Understandably, the landlord too would suffer some hardship if the term is reduced in that the landlord will be deprived of rent under the current fixed term tenancy until the expiry of this tenancy on 30 January 2027.

11. I find however that the tenant’s hardship would be greater than the landlord’s hardship in this case.

12. I therefore reduce the term of the fixed term tenancy to 7 March 2026.

13. Where the Tribunal reduces a fixed-term tenancy, it may order the tenant to pay the landlord reasonable compensation for any resulting loss. See section 66(2) of the Act.

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14. Section 85 RTA also requires me to consider the substantive merits and justice of the case while applying the relevant law.

15. The landlord is obliged to mitigate their loss in the circumstances.

16. In [NAME] v Protheroe CIV-2009-070-65, [NAME], 19 October 2009, the District Court held that where the parties agree to the fixed term being reduced, or an application is made under section 66, there is a requirement that the landlord take reasonable steps to find a replacement tenant.

17. Following the approach by the District Court, the landlord has a duty to take all reasonable steps to limit the loss arising from the tenant’s actual or anticipatory breach of contract.

18. In [NAME] v [NAME] (District Court Nelson, TT 328/00, 5 February 2001) the Court held that the tenant was not in breach but had asked to be released from the tenancy and had agreed to pay 5 week’s rent – it was said that section 49 would have applied if the landlord had refused to release the tenant and the tenant had unilaterally cancelled the tenancy and vacated. However, it was accepted that, in those circumstances, section 49 would place a duty on the landlord to take steps to find a replacement tenant.

19. Other cases have proceeded on the basis that a tenant who vacates before the end of a fixed-term tenancy is in breach, and the landlord has a duty to mitigate their loss by finding a replacement tenant - see [COMPANY] v [NAME] (District Court Auckland, CIV-2011-[PHONE], 20 February 2012) and [NAME] v [NAME] (District Court Wellington, CIV-2008-085-1269, 28 February 2008).

20. Those cases impose a duty on the landlord to mitigate his or her loss arising from a breach of a tenancy agreement, pursuant to section 49 of the Act. They import an objective test, which means a landlord must take all reasonable steps that an objective person would take to limit the loss, including taking back possession of the premises and finding a suitable replacement tenant.

21. The landlord has failed to mitigate their loss properly.

22. The landlord has advertised their vacant room 2 and found a new tenant for room 2 to commence on 20 June 2026. No replacement tenant has been found for room 3 to date because the landlord has been focused on letting out their existing vacancies before reletting the current tenant’s room 3.

23. The landlord’s decision to put the reletting of room 3 last or down the list of priorities of rentals counts against the landlord as not having taken reasonable steps to mitigate their loss.

24. In [APPELLANT], the landlord took reasonable steps and found a new tenant for the property after 3 months. The District Court however only allowed the landlord to charge rent for 2 months after notice had been given by the tenant that the fixed term tenancy would not be followed through. Given the Tauranga rental market,

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the period of 2 months was found to be reasonable for landlords to find replacement tenants. This is consistent with a landlord’s duty to mitigate, which is paramount.

25. I accept that in Christchurch, especially in rental markets aligned to university occupancy and tertiary education needs, different factors apply.

26. However, there is still a paramount requirement that the landlord take reasonable steps to find a replacement tenant rather than just rely on the fixed term running through.

27. Having regard to substantive merits and justice of the case, I consider it fair under the circumstances that the landlord is allowed to charge rent until 6 June 2026 which is 3 months after the tenant had given notice for the breaking of the fixed term and having vacated on 7 March 2026.

28. The rent owing to 6 June 2026 is $800.00. The bond is $840.00.

29. For those reasons, the landlord is entitled to $800.00 of the bond, and the remaining $40.00 from the bond will be returned to the tenant.

30. I dismiss the remainder of the parties’ respective claims.

[NAME]

09 June 2026

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Please read carefully: Visit justice.govt.nz/tribunals/tenancy/rehearings-appeals for more information on rehearings and appeals.

Rehearings You can apply for a rehearing if you believe that a substantial wrong or miscarriage of justice has happened. For example: • you did not get the letter telling you the date of the hearing, or • the adjudicator improperly admitted or rejected evidence, or • new evidence, relating to the original application, has become available.

You must give reasons and evidence to support your application for a rehearing. A rehearing will not be granted just because you disagree with the decision. You must apply within five working days of the decision using the Application for Rehearing form: justice.govt.nz/assets/Documents/Forms/TT-Application-for-rehearing.pdf

Right of Appeal Both the landlord and the tenant can file an appeal. You should file your appeal at the District Court where the original hearing took place. The cost for an appeal is $260. You must apply within 10 working days after the decision is issued using this Appeal to the District Court form: justice.govt.nz/tribunals/tenancy/rehearings-appeals

Grounds for an appeal You can appeal if you think the decision was wrong, but not because you don’t like the decision. For some cases, there’ll be no right to appeal. For example, you can’t appeal: • against an interim order • a final order, or the failure to make an order, where the amount in dispute on appeal is

less than $1000 • a final order to undertake work, or the failure to make an order, where the value of the

work in dispute on appeal is less than $1000.

Enforcement Where the Tribunal made an order about money or property this is called a civil debt. The Ministry of Justice Collections Team can assist with enforcing civil debt. You can contact the collections team on [PHONE] or go to justice.govt.nz/fines/civil-debt for forms and information.

Notice to a party ordered to pay money or vacate premises, etc. Failure to comply with any order may result in substantial additional costs for enforcement. It may also involve being ordered to appear in the District Court for an examination of your means or seizure of your property.

If you require further help or information regarding this matter, visit tenancy.govt.nz/disputes/enforcing- decisions or phone Tenancy Services on [PHONE].

Mēna ka hiahia koe ki ētahi atu awhina, kōrero ranei mo tēnei take, haere ki tenei ipurangi tenancy.govt.nz/disputes/enforcing-decisions, waea atu ki Ratonga Takirua ma runga [PHONE] ranei.

https://www.justice.govt.nz/tribunals/tenancy/rehearings-appeals https://www.justice.govt.nz/assets/Documents/Forms/TT-Application-for-rehearing.pdf https://www.justice.govt.nz/tribunals/tenancy/rehearings-appeals/ https://www.justice.govt.nz/fines/about-civil-debt/ https://www.tenancy.govt.nz/disputes/enforcing-decisions https://www.tenancy.govt.nz/disputes/enforcing-decisions http://www.tenancy.govt.nz/disputes/enforcing-decisions/

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A manaomia nisi faamatalaga poo se fesoasoani, e uiga i lau mataupu, asiasi ifo le matou aupega tafailagi: tenancy.govt.nz/disputes/enforcing-decisions, pe fesootai mai le Tenancy Services i le numera [PHONE].