Tenant Ordered to Pay $1,898.64 After Prematurely Terminating Fixed-Term Tenancy

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[2025] NZTT 5106088

TENANCY TRIBUNAL AT [Event location suppressed]

APPLICANT: [redacted]

Landlord

RESPONDENT: [redacted]

Tenant

TENANCY ADDRESS: [Tenancy address suppressed]

ORDER

1. The Tribunal orders suppression of both parties’ identifying details.

2. [[NAME]] to pay [The landlord/s] $1,898.64 (the debt), calculated as shown in table below.

Description Landlord Tenant Rent arrears to 7/12/24 $582.56 Water rates & power $28.65 Break lease cost Rent difference Filing fee

$570.43 $690.00

$27.00

Total award $1,898.64 Total payable by Tenant to Landlord $1,898.64

3. [[NAME]] will pay the debt at the rate of $20 per week commencing immediately.

4. If the tenant fails to make any payment within 2 working days of the due date, the balance of the debt owing will be payable immediately and can be enforced through the District Court.

Reasons:

1. Both parties attended the hearing. The landlord was represented by [The landlord’s representative/s].

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2. The tenant attended with the assistance of her son and an interpreter.

3. This was a fixed term tenancy for 12 months that commenced in May 2024. The tenant sought to end the tenancy early on 27 September for financial hardship reasons. Agreement was reached that the landlord would advertise for a replacement tenancy and the tenant would pay the break lease costs and the rent until a replacement tenancy was secured.

4. The landlord subsequently advertised but a replacement tenancy was not secured until 8 December and only at a reduced rental. [[NAME]]’s tenancy was for $510 in weekly rent, the new tenancy was secured at $480.

5. The landlord has applied for rent arrears, water rates and power costs until 7 December, break lease costs and the difference in rent from 8 December until the end of the original term, 18 May 2025. [The landlord’s representative/s] says this is reasonable given the owner has already lost out financially as they will not be able to increase the rent again until December 2025.1

6. [[NAME]] agrees to the water rates and power costs and the break lease fee, however objects to paying rent until 7 December and the rent difference. She considers (via her son) that the landlord did not act reasonably in advertising the property and so the delay in re-renting was unreasonable. She considers they delayed in advertising and then did not prioritise this property in trying to re-tenant.

7. Her son asked the landlord to advertise the property at $50 less on 20 October saying they would make up the difference for the remainder of the tenancy. The landlord initially continued advertising at the actual rent of $510 but noted in the conditions that the rent would be subsidised until May.

8. [[NAME] says this was disingenuous of the landlord as it was not an advertisable rent reduction given people who could not afford $510 would not read into the blurb of the advertisement.

9. [The landlord’s representative/s] says they had to initially advertise this way so that the original rent remained in order that the landlord could increase the rent in May 2025. When this strategy was not successful, they lowered the actual rent to $480 which is $20 higher than [[NAME] had authorised. She submits that [[NAME]] should pay this because that is similar to what they proposed and has resulted in less debt than they suggested. This was the only way they could secure a replacement tenancy she says.

10. [[NAME] no longer agrees to pay the rent difference because they did not agree specifically to the reduction amount (they agreed to a $50 rent reduction and this is a $30 reduction).

1 Pursuant to section 24 of the RTA

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The law and discussion

11. Parties enter into a fixed term tenancy for security. For tenants this is security of tenure; they can be sure they have a home for at least the agreed term. For landlords it is security of income; they can rely on a set amount of income from their investment.

12. If a tenant defaults on that contract, and the landlord accepts the repudiation, then the tenancy ends on the terms agreed. In such a situation of surrender the landlord does not have to agree and can stipulate terms provided they are reasonable.

13. Here the parties agreed to end the tenancy on the basis [[NAME]] continue to pay rent until a replacement tenancy was secured and pay the break lease fee. The difficulty arose, as it often does, when a replacement tenancy was not easily obtained.

14. There is no evidence that the landlord delayed nor acted unreasonably in advertising the property. They have provided evidence that the advertisement went live just days after the lease break was sought. I accept [The landlord’s representative/s]’s advice that it was a difficult time in the market, and they had many apartments, some cheaper available for rent in the complex at the time.

15. The parties then varied the break lease agreement to reduce the advertised rent by $50, the disparity of which [[NAME] would pay. This authorisation was not specifically followed but eventually the rent was reduced by $30 per week and this tactic was successful.

16. There are two schools of thought on the legitimacy of rent difference in such situations. On the one hand such a loss could be considered an expense reasonably recoverable pursuant to s44A of the Residential Tenancies Act 1986 (RTA) because it is a cost the landlord is incurring because of the break. Alternatively, the loss can be considered as damages to reinstate the victim, being the landlord, on the repudiation to the position they would have been in had the breach in contract not incurred.

17. It is a well-accepted principle when awarding damages generally that, so far as money can do it, the injured party shall be put in the same position as they would have been in, but for the breach of the tenancy agreement. Liability exists for foreseeable losses flowing from the breach of a tenancy agreement.

18. It is an implied term in any such agreement that the landlord would make reasonable efforts to obtain a replacement tenancy on the same terms, and any reduction in rate would be reasonable in the circumstances.

19. Following either of those paths I consider it reasonable that the tenant pay the rent difference. Firstly, this is a loss the landlord is suffering due to the breaking of the lease. The full loss they will suffer is the inability to increase the rent for

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another six months pursuant to section 24 of the RTA, but the full loss is not sought.

20. Secondly the reduction in rent to advertise was agreed to by [[NAME]. He in fact offered a higher amount than he is going to be paying. Having viewed the offer he provided to the landlord I consider he agreed to this term of ending the fixed term tenancy. He was clear he wanted to rent reduced to secure a replacement tenancy. It was reduced and a replacement tenancy was obtained. The fact that he is to pay less than he offered to pay is beneficial.

21. I am also satisfied that [The landlord’s representative/s] was sufficiently diligent in her efforts to secure a replacement tenancy and had to reduce the rent to obtain that replacement. The situation would have been more financially dire for [[NAME]] had the replacement not been obtained.

22. Accordingly, I find [[NAME]] liable for the rent reduction.

23. I appreciate that this is a financial burden that is difficult for her, and I empathise. However, her financial situation is not one I can take into account when applying the law as there is no provision for me to do so in the RTA. Breaking a fixed term lease often comes with a considerable financial burden as it has here for both parties.

24. Because [The landlord/s] has wholly succeeded with the claim I must reimburse the filing fee.

25. Because a significant portion of this order was consented, I consider it just pursuant to sections 85 and 95A of the RTA to suppress both parties’ identifying details from the published order.

[NAME] 10 May 2025

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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 for the payment of less than $1000 • a final order to undertake work worth 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.

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].

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/

Reasons: