Tenant's Request to Break Fixed-Term Tenancy Denied

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[2026] NZTT 5465516, 5491331

TENANCY TRIBUNAL AT REMOTE LOCATION | TE TARAIPIUNARA RETIHANGA

APPLICANT: [redacted]

Tenant

RESPONDENT: [redacted] [NAME]

Landlord

TENANCY ADDRESS: [ADDRESS], [POSTCODE]

ORDER

1. The tenant application to break the fixed-term tenancy of [NAME] and [NAME] at [ADDRESS], [POSTCODE] is dismissed.

2. [NAME] and [NAME] must pay [COMPANY] As Agent For [NAME] $2,285.71 immediately.

Description Landlord Tenant Rent arrears $6,285.71 Total award $6,285.71 Bond $4,000.00 Total payable by Tenant to Landlord $2,285.71

3. The Bond Centre is to pay the bond of $4,000.00 (BN-00109121) to [COMPANY] As Agent For [NAME] immediately.

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Reasons:

1. Both parties attended the hearing.

2. The tenant has applied for reduction of the fixed-term tenancy due to end on 5 July 2026.

3. The landlord seeks rent arrears.

4. A party who brings a claim to the Tenancy Tribunal must prove on the balance of probabilities (more likely than not) that their version of events took place. Independent witnesses, corroborating documents and photographs are an important part of discharging this burden of proof.

5. The issue of evidence at Tenancy Tribunal hearings was considered by the District Court in Kaipo v Clarke & McCarthy (DC) TT233/02. Judge Mather stated:

“…[the applicant] needs to be reminded that like anyone who brings an application before a Tribunal or a Court, it is incumbent upon the applicant to provide the evidence necessary to prove the case. If the applicant fails to do that, then their application will be dismissed whether it has merit or not because it is up to the applicant to provide the necessary evidence. It is not up to the other parties and it is certainly not up to the Tribunal to extract evidence.”

6. In the decision that follows I may not have referred to all the oral testimony and other evidence presented, but the parties should know it has been considered.

Should the fixed-term tenancy be reduced?

7. The usual legal position with a fixed-term contract is that the term of the contract will be applied strictly, and it is only in limited circumstances that a court or tribunal will interfere with it. For residential tenancies, one of those circumstances is found in s 66 Residential Tenancies Act 1986, which allows for the reduction of fixed term tenancy agreements.

8. There is a high threshold to be met before the Tribunal will reduce the term. In particular the applicant will need to establish that:

a. there has been a change in their circumstances

b. the change was unforeseen

c. the unforeseen change will result in severe hardship to the applicant if the tenancy is not reduced

d. the severe hardship the applicant will suffer if the term is not reduced exceeds the hardship the other party will suffer if the term is reduced.

9. Section 66(2) provides that, if the Tribunal reduces the term of the tenancy, it may order the applicant to pay reasonable compensation to the other party for any loss or damage which results from the reduction of the term.

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10. The weighing of relative hardship is a question of fact to be assessed objectively in each case.

11. The tenants submitted:

We respectfully apply to the Tribunal for early termination of our fixed-term tenancy on the grounds that continuing the tenancy would cause our household significant financial and personal hardship. At the commencement of the tenancy, we entered into the agreement with the expectation of stability for our family. However, in January of this year, we were informed by phone that the rental property would be placed on the market immediately. This was an unforeseen change in circumstances that fundamentally altered the security of our tenancy. As a result of the property being put up for sale, and in order to provide long-term security and stability for our [NAME] family, we have since purchased our own home. We now have a mortgage that we are required to service. Paying both the mortgage on our newly purchased home and the rent on the rental property is not financially sustainable for our household. Continuing to meet both obligations places us under significant financial pressure and is not manageable for us for the remainder of the fixed-term tenancy. In addition, we also have a [NAME] who is 15 weeks old. As the rental property is currently on the market the ongoing viewings and associated disruptions make the property less suitable for a household with a very [NAME] infant. These disruptions are particularly difficult as our [NAME] is exclusively breastfed. The stress and interruptions caused by open homes and maintenance —some of which have occurred without notice—have interfered with our ability to feed comfortably and has impacted milk supply. We have acted reasonably and in good faith throughout this process. We made an initial offer to the landlord of four weeks’ notice and $1,000 as compensation for early termination. When this was declined, we made a further offer of four weeks’ notice and $4,000. Both offers were declined. We believe that the hardship to our family if we are required to continue the tenancy outweighs any hardship the landlord would face if the tenancy were terminated early. The property is already being marketed for sale, and we have continued to facilitate access and uphold our obligations as tenants. Ending the tenancy early would allow us to move into the home we have purchased, alleviate the significant financial hardship we are experiencing, and provide a stable and suitable environment for our infant.

For these reasons, we respectfully request that the Tribunal grant early termination of the fixed-term tenancy.

12. I explained at the hearing the significant threshold required before any change in circumstances would be deemed such that a break in a fixed-term tenancy was justified.

13. The [NAME] are entitled to attempt to sell their house during the tenancy. The tenants retained some rights regarding reasonable access (see s 45(3A)(b) RTA) and the continuation of the fixed-term tenancy to conclusion was more a certainty under statute (s 50(1)(a) RTA) subject to maintaining obligations.

14. There has not been an any unforeseen change in the tenant's circumstances, as outlined, that justifies the break in the fixed-term contract as sought when the tenants lodged their application.

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15. The tenants would suffer hardship if the term of the tenancy were not reduced but that becomes somewhat moot as the first “leg” of any grounds to break, being a change in circumstances that were reasonably unforeseeable is not evident here.

16. The landlord would also suffer hardship if the term was reduced but I consider it also had more options to alleviate or manage any such hardship. The premises has been marketed for a considerable period now with it raised 1 January 2026 and the first evidence of prospective purchaser feedback on 8 February 2026. There appears little immediate prospect of any sale. The challenge in managing and reletting the premises while listed is addressed below.

17. I do not find that the tenants’ have established grounds for a break in the fixed term as sought. That application is dismissed.

So what rent is owing?

18. Given the lack of tenant success, the claim of the landlord for rent arrears must be determined. The landlord provided a rent summary that was not disputed. It reflects a reduction in weekly rent from $1000.00 to $900.00 in recognition of the impact of sales related activities on the tenants. The tenants left the premises as advised to the landlord and they stopped paying rent after the last payment was made on Friday 23 March 2026.

19. I do not consider the sale related activities as described to have been unreasonable. The owner’s decision to market the premises was open to them. It was also open to the tenants to have the Tribunal to determine any dispute regarding reasonableness of marketing related activities.

20. However, the circumstances here do not justify, in my mind, an order of all rent as due.

21. When considering claims, the Tribunal must consider s 85 RTA which provides that the Tribunal shall determine a dispute according to the substantial merits and justice of the case and in doing so, shall have regard for the law but shall not be bound to give legal effect to strict legal rights or obligations or to legal forms or technicalities. This provision recognises that, although applying established legal principles will generally produce a fair result, there are circumstances where it will not. In this situation, the Tribunal is entitled to depart from the strict application of the law to achieve a just outcome. Equally, where the law is uncertain, the Tribunal may adapt an approach that best meets the merits and justice of the case.

22. The owner was entitled to put the house on the market. That, and related activities, have been confirmed as entitled and not onerous. It is no basis to break the fixed-term tenancy.

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23. However, the submissions raise some equitable concerns given, as the agent said, it was “virtually impossible” to find new tenants willing to take on a tenancy with uncertainty of tenure. The softening market meant the agent had provided the [NAME] with an updated rent appraisal that was $250.00 per week less than the$1000.00 required under this tenancy agreement. I was told that the [NAME] were advised that the current tenants could be held liable for any difference between the current rent and any future tenancy.

24. Such an appraisal would have been unwelcome news to the [NAME], both in terms of any prospective purchaser having such consideration in any decision to make an offer to purchase, as well as the reality of the changed rental market conditions if they were to take the premises off the market and relet.

25. I heard the owner took matters under direct management in May 2026, listing the premises for rent. I rely on the tenant submissions as no advertisement was provided, just the recounting. The agent confirmed she was no longer involved in any related activities beyond appearing at this hearing (she confirmed the owner awareness of these applications, this hearing, and her authority to act).

26. I was told the listing seen on 12 May 2026 advertised rent as $1100.00 or thereabouts. It was more than the current rent and greatly inflated from the appraised amount. Concerningly, I was also told the availability date was 5 July 2026 – that being the end of this fixed period. Both the price and availability as stated can be reasonably seen as further challenges to a new tenancy forming.

27. In Huang v Ashworth [2024] NZDC 15726 the District Court confirmed there is a duty to mitigate for rent arrears (see section 49 Residential Tenancies Act 1986). [ADDRESS] confirmed the test of what the landlord ought to do to mitigate its loss is a factual one and depends on:

a. Whether the landlord took all reasonable steps to mitigate its loss; and b. More particularly, whether it acted reasonably having regard to all

the circumstances of the case.

28. The submissions made gave rise to a possibility the landlord might have failed to mitigate its loss in respect of the rent arrears. The evidence from the agent of [NAME] activity reads more of a summary of potential purchaser feedback, all added in by the listing agent, not the property manager. There is no evidence of landlord urgency to address the growing rent liability through any positive change in approach, given the lapsed time and lack of traction since listing reflects an equal softening for sale in the property market. The readvertising by the [NAME] with a rent amount greater than the current rent, and well inflated from that assessed in their agent’s market appraisal is not considered a proactive step to address the lack of interest. That, combined with the availability date being extended to the end of the fixed-term when the premises was vacant and available sooner leaves open the conclusion that other priorities were being prioritised.

https://[NAME].today/download/huang-v-ashworth-2024-nzdc-15726/

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29. I consider a reduction to the rent arrears payable, due to both the real impediment of a new tenancy forming due to the premises being marketed for sale as the owner’s priority, as well as a failure of the landlord to mitigate as no traction in either a sale or realistic relet become apparent over what is now some four plus months of active marketing.

30. I am left with an impression that there is an unfair reliance on the tenant rent liability in the approach to marketing the premises for sale or rent since February 2026, to the detriment of the tenants. It would be unjust to order full rent arrears to be paid.

How much rent arrears is to be paid?

31. I award $6,285.71 as tenant liability for rent arrears, this is based on rent arrears as at 22 May 2026, a date considered, on balance, a fair recognition of the facts in this matter.

Filing fee

32. Given the orders made, both parties have had some success and I leave each to carry their cost of filing.

[NAME]

16 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 [NAME]/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 [NAME]/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.[NAME]/disputes/enforcing-decisions https://www.[NAME]/disputes/enforcing-decisions http://www.[NAME]/disputes/enforcing-decisions/

Reasons: