fixed term tenancy
📖 What is fixed term tenancy? Meaning and definition
In New Zealand, a fixed term tenancy means that both the tenant and the landlord are committed to the rental agreement for a predetermined duration. This type of tenancy provides certainty for both parties regarding how long the agreement will last. For example, a tenancy might be set to end on a specific date, such as 23 November 2025.
If a tenant decides to end a fixed term tenancy early, this is often referred to as 'breaking the lease'. When a tenant breaks a fixed term tenancy, they are generally responsible for certain costs. These can include rent until a new tenant is found or until the original end date of the tenancy, as well as reasonable expenses incurred by the landlord to re-let the property, such as advertising fees, viewing costs, and administrative work for new tenancy documents and credit checks.
However, if a tenant abandons a fixed term tenancy, meaning they leave the property without notice and stop paying rent, they are liable for rent until the end of the term or until the landlord enters a new agreement. In such cases, the landlord may not have an obligation to mitigate their loss. If the tenant has not abandoned the property but has breached the agreement, the landlord generally has a duty to take reasonable steps to mitigate their loss, such as finding a replacement tenant.
Sometimes, an early release from a fixed term tenancy can be agreed upon by both the landlord and tenant. This agreement is often conditional on the tenant paying the landlord's reasonable and actual break lease fees, as outlined in the Residential Tenancy Act 1986.
📋 Requirements
- A specific end date for the tenancy must be agreed upon.
- The tenancy agreement must be for a set period of time.
- If a tenant seeks early release, an agreement may be conditional on paying reasonable break lease fees.
📝 Procedure
- Tenant expresses a desire to end the fixed term tenancy early.
- Landlord and tenant may agree on an early release, often with conditions.
- Tenant pays reasonable costs incurred by the landlord for re-letting the property, such as advertising and administrative fees.
- Landlord finds a replacement tenant to minimise the period for which the original tenant is liable for rent.
💡 Examples
- A tenant who wanted to end their fixed term tenancy early agreed to pay the landlord's costs for re-advertising the property and preparing documents for a new tenant.
- A landlord applied to the Tenancy Tribunal for rent arrears after a tenant vacated a fixed term tenancy, and the tenant was ordered to pay rent until a new tenant started.
- A tenant was granted an early release from a fixed term tenancy that was due to end in November 2025, on the condition that they paid the landlord's break lease fees of $644.00.
- When a tenant did not return keys after ending a fixed term tenancy, the landlord had to get a new swipe card and was compensated for this cost.
📚 Legal basis
- Residential Tenancy Act 1986
❓ Frequently asked questions
What happens if I want to end my fixed term tenancy early?
If you want to end your fixed term tenancy early, you are generally liable for rent until the end of the term or until the landlord finds a new tenant. You may also be responsible for the landlord's reasonable costs incurred in re-letting the property, such as advertising and administrative fees.
Does my landlord have to find a new tenant if I break my fixed term tenancy?
If you have breached the terms of the agreement but have not abandoned the property, your landlord generally has a duty to take reasonable steps to mitigate their loss, which includes trying to find a new tenant. However, if you abandon the property, the landlord may not have this obligation.
What are 'break lease fees'?
Break lease fees are the reasonable and actual costs a landlord incurs when a tenant ends a fixed term tenancy early. These can include expenses like re-advertising the property, conducting viewings, and preparing new tenancy documents and credit checks.
Can a landlord claim rent from me after I've moved out of a fixed term tenancy?
Yes, if you end a fixed term tenancy early, you can be liable for rent until the original end date of the tenancy or until the landlord successfully re-lets the property to a new tenant, whichever comes first.
Is there a difference between 'breaking' and 'abandoning' a fixed term tenancy?
Yes, there is a difference. 'Breaking' a tenancy usually involves some communication or agreement to end it early, even if you are still liable for costs. 'Abandoning' means leaving the property without notice and ceasing to pay rent, which can have different implications for the landlord's obligation to mitigate losses.
How do I know if the break lease costs claimed by my landlord are reasonable?
Whether break lease costs are reasonable is a question of fact. The Tenancy Tribunal will assess if the amounts sought by the landlord are fair for the work performed, such as advertising, viewings, and administrative tasks. You can present your case to the Tribunal if you dispute the reasonableness of the costs.