severe hardship
📖 What is severe hardship? Meaning and definition
In New Zealand tenancy law, 'severe hardship' is a key factor the Tenancy Tribunal considers when a tenant or landlord applies to reduce the term of a fixed-term tenancy. A fixed-term tenancy is generally a binding contract that cannot be ended simply by giving notice. However, the Residential Tenancies Act 1986 allows the Tribunal to intervene in specific circumstances.
For the Tribunal to reduce a fixed-term tenancy due to severe hardship, three main conditions must be met. Firstly, there must have been an unforeseen change in the applicant's circumstances. This means something unexpected happened after the tenancy agreement was made. Secondly, the applicant must demonstrate that they would experience severe hardship if the fixed term is not reduced. This hardship needs to be substantial.
Finally, the Tribunal must weigh the hardship of the applicant against any hardship the other party would face if the tenancy term is reduced. The applicant's hardship must be greater than the other party's. If these conditions are met, the Tribunal may reduce the fixed term and can also order the tenant to pay the landlord reasonable compensation for any resulting financial loss.
📋 Requirements
- There has been an unforeseen change in the applicant’s circumstances.
- There would be severe hardship to the applicant if the fixed term is not reduced.
- The applicant’s hardship would be greater than the hardship to the other party if the term is reduced.
📝 Procedure
- An applicant (tenant or landlord) applies to the Tenancy Tribunal to reduce a fixed-term tenancy.
- The Tribunal considers evidence and submissions from both parties regarding the unforeseen change in circumstances.
- The Tribunal assesses whether the applicant would face severe hardship if the tenancy term is not reduced.
- The Tribunal compares the applicant's hardship with the potential hardship to the other party if the term is reduced.
- If the conditions are met, the Tribunal may reduce the fixed term and can order compensation for the landlord's loss.
💡 Examples
- A tenant's family experienced significant noise and vibration from nearby large-scale construction work, causing medical effects to a partner, which was an unforeseen change leading to severe hardship.
- A tenant was unable to move into a rented property on the agreed date due to the premises not being ready, and faced the prospect of paying double rent, which constituted severe hardship.
- A tenant sought to end a fixed-term tenancy early due to unforeseen noise and disruption from construction work close to their home, impacting the welfare of their son and themselves.
- A tenant who had not yet occupied a property found a different place to rent because the initial premises were not ready, leading to severe hardship if they had to pay for both.
📚 Legal basis
- Residential Tenancies Act 1986
❓ Frequently asked questions
What makes a change in circumstances 'unforeseen'?
An unforeseen change is something unexpected that happened after you entered into the fixed-term tenancy agreement. It's a situation that you couldn't reasonably have predicted or planned for at the time.
How does the Tenancy Tribunal decide if hardship is 'severe'?
The Tribunal looks at the specific details of your situation and how much difficulty or suffering you would experience if the tenancy continued. It's not just about inconvenience; it needs to be a significant impact on your welfare or finances.
Can a landlord also claim severe hardship to end a fixed-term tenancy early?
Yes, the law applies to both tenants and landlords. If a landlord experiences an unforeseen change in circumstances that would cause them severe hardship, they can also apply to the Tenancy Tribunal to reduce the fixed term.
What kind of compensation might I have to pay if my fixed-term tenancy is reduced?
If the Tribunal reduces your fixed-term tenancy, it may order you to pay the landlord 'reasonable compensation' for any loss they suffer. This could include lost rent while they find a new tenant, or costs associated with re-letting the property.
Is 'severe hardship' the only way to end a fixed-term tenancy early?
Generally, a fixed-term tenancy is a binding contract. While severe hardship under Section 66(1) of the RTA is a specific pathway for early termination, you can also try to reach a mutual agreement with your landlord to end the tenancy early. It's always best to discuss options with the other party first.
Do I need a lawyer to apply to the Tenancy Tribunal for severe hardship?
While you can represent yourself at the Tenancy Tribunal, the process can be complex. If your case involves significant hardship or a large amount of money, you might consider getting advice from a lawyer or a tenancy advocate to help prepare your case and understand your rights and obligations.