Tenant Ordered to Pay Rent Arrears and Fees
📌 In brief
The Tenancy Tribunal ordered the tenant to pay rent arrears and fees, rejecting the landlord's claim for a break lease penalty. The tenant had signed a fixed-term tenancy but did not move in and tried to cancel the agreement.
⚖️ Legal holding
A tenant is liable for rent throughout the fixed term unless a new tenancy starts earlier or the Tribunal makes an order under s66 of the Residential Tenancies Act.
📖 What the law says
This rule states that any part of a tenancy agreement that makes a tenant liable to pay all or part of the remaining rent, an increased rent, or a specific sum as damages or penalty if they break the agreement, is not valid. This means landlords cannot automatically charge a tenant for the entire remaining rent or a set penalty if the tenant breaches the agreement.
This rule allows the Tenancy Tribunal to shorten a fixed-term tenancy if a tenant applies and can show that an unforeseen change in their situation would cause them severe hardship if the tenancy continued. The Tribunal must also be satisfied that the tenant's hardship would be greater than any hardship the landlord would face if the tenancy term was reduced.
Plain-English explanation — does not replace advice from a lawyer.
📖 Technical summary
The Tribunal ordered the tenant to pay rent arrears and fees, dismissing the landlord's claim for a break lease penalty.
📜 Headnote Official document
The Tribunal ordered the tenant to pay rent arrears and fees, dismissing the landlord's claim for a break lease penalty. The tenant had entered into a fixed-term tenancy but did not move in and sought to cancel the agreement.
📚 Full judgment Official document
__________________________________________________________________________________ 5087288 1
[2025] NZTT 5087288
TENANCY TRIBUNAL - Video Location
APPLICANT: [redacted]
Landlord
RESPONDENT: [redacted]
Tenant
TENANCY ADDRESS: Unit/[ADDRESS], [POSTCODE]
ORDER
1. [NAME] and [NAME] must pay [COMPANY] As Agent For [NAME] $1,239.57 immediately, calculated as shown in table below:
Description Landlord Rent arrears $1,028.57 Advertising Fee $184.00 Filing fee reimbursement $27.00 Total award $1,239.57 Total payable by Tenant to Landlord $1,239.57
2. The landlord’s claim for a break lease “penalty” is dismissed.
Reasons:
1. Both parties attended the hearing.
2. The parties entered into a fixed term tenancy from 30 November 2024 to 29 November 2025. The tenants did not move in and sought to cancel the agreement. The tenants say that their situation changed shortly after signing the tenancy agreement.
3. A tenant is liable for rent throughout the fixed term, unless a new tenancy starts earlier (or the Tribunal makes an order under s66 Residential Tenancies Act
__________________________________________________________________________________ 5087288 2
(RTA)). These tenants did not apply for a reduction of the fixed term tenancy under s66.
4. The landlord allowed early termination of the tenancy but sought advertising fees, reletting costs and rent until the new tenancy started on 15 December 2024.
5. The tenant accepted liability for an advertising fee. The tenant is also liable for rent until the new tenancy started. I have made orders accordingly.
6. The landlord also claimed an amount equivalent to a weeks rent, described in an invoice to the tenant as a “penalty” for early termination.
7. Section 32 RTA prevents the landlord from charging a pre-determined amount by way of penalty.
8. A landlord can recover costs incurred in respect to an assignment, a subletting, parting with possession or termination under Section 50(1)(d) RTA. See 44A RTA. However, a landlord must first provide the tenant with an itemised account of the costs incurred by the landlord.
9. In this case the landlord has imposed a “penalty” rather than providing evidence and an account of costs paid by the landlord in respect of the early termination. The application for the penalty fee is dismissed.
10. As the landlord was substantially successful, I have awarded reimbursement of the Tribunal application fee.
R Morgan
24 February 2025
__________________________________________________________________________________ 5087288 3
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.
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/
__________________________________________________________________________________ 5087288 4
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].
Reasons:
⚖️ What tends to weigh in cases like this
✅ Tends to be accepted
- The tenants accepted liability for an advertising fee.
- The landlord was awarded rent until the new tenancy started.
- The landlord was awarded reimbursement of the Tribunal application fee.
❌ Tends to be rejected
- The landlord claimed an amount equivalent to a week's rent as a "penalty" for early termination.
- The landlord did not provide an itemized account of the costs incurred due to the early termination.
- The landlord attempted to impose a predetermined penalty amount which is prohibited under Section 32 RTA.
Patterns observed in similar cases in this collection — every case is unique.
❓ Frequently asked questions
What did this decision decide?
The tenant was ordered to pay rent arrears and fees, and the landlord's claim for a break lease penalty was dismissed.
What was the dispute about?
The dispute was about whether the tenant owed rent arrears and fees, and whether the landlord could charge a penalty for breaking the lease.
How did the court decide, and why?
The court decided that the tenant was liable for rent arrears and fees because they did not apply for a reduction of the fixed term tenancy under s66 of the Residential Tenancies Act. The claim for a penalty was dismissed as it violated section 32 of the Act.
Which laws or rules were applied?
Sections 32 and 66 of the Residential Tenancies Act 1986 were applied.
What was the argument that mattered most?
The argument that mattered most was that the tenant did not apply for a reduction of the fixed term tenancy under s66 of the Residential Tenancies Act, making them liable for rent arrears and fees.
Was the decision for or against the person who brought the case?
The decision was against the tenant who brought the case.
What does this mean for someone in a similar situation?
Someone in a similar situation should consider applying for a reduction of the fixed term tenancy under s66 of the Residential Tenancies Act if they cannot fulfill their rental obligations.
What evidence or documents mattered?
The judgment does not specify the evidence or documents that mattered.