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10 ways to terminate a tenancy agreement

Photo: Old House by GPS 56

There are multiple reasons why a landlord or a tenant would want to end their tenancy. It is important to understand the rules that apply to different situations.

Here are 10 reasons to terminate a tenancy agreement:

1. When a fixed term has ended, and correct notice has been given

A fixed-term tenancy only lasts for a set amount of time. No notice can be given to terminate the agreement early. Fixed-term tenancy automatically becomes periodic upon expiry unless correct notice has been given to terminate it at the end of the fixed term. Whether you’re a landlord or a tenant, the notice can only be given between 21 days and 90 days before the end of the term.

If there are less than 21 days left until the end of the fixed term, you can’t give notice to terminate the tenancy agreement. When the fixed term comes to an end, and the tenancy becomes periodic a notice can be given to terminate a now periodic tenancy.

2. During a periodic agreement and correct notice has been given

The person ending the agreement must give correct notice in writing, by signing the document and stating the address of the tenancy and exact date when the tenancy is due to end.

A tenant must give at least 21 days’ notice and a landlord must give at least 90 days’ notice (unless special circumstances apply when a landlord can give 42 days’ notice, read below)

3. By mutual agreement

Both parties can mutually agree to terminate an agreement early. The agreement should be in writing and may include penalties.

4. Breach of the tenancy agreement

Either a landlord or a tenant can apply to the Tenancy Tribunal to terminate the tenancy early if the other side has breached the tenancy agreement or the Residential Tenancies Act.

5. Breaking a Lease

If a tenant or a landlord decide to end a fixed-term tenancy agreement early without sufficient reason, they’re breaking a lease. A tenancy agreement is a legally binding contract. If broken, compensation will probably need to be paid.

6. Abandoned premises

If a landlord has reasonable grounds to believe that a property has been abandoned, they can issue 24 hours’ notice (plus appropriate service time) to enter the property to confirm it has been abandoned. The landlord can then apply to the Tenancy Tribunal to have the tenancy terminated and possession of the property returned to them.

7. Death of a tenant

In circumstances when a solo tenant dies, the tenancy ends 21 days after written notice is given due to the tenant’s death or the day agreed by the landlord and the tenant’s personal representative or their next of kin.

8. Severe hardship

If either a landlord or a tenant experience unexpected changes in circumstances, they can apply to the Tenancy Tribunal for help. The Tribunal can choose to end fixed-term tenancy early if they believe the applicant will suffer from severe hardship if they continue with the tenancy.

It is always advisable for the tenant and landlord to discuss these circumstances first between themselves prior to taking their matter to the Tenancy Tribunal.

9. Property got sold

If a tenancy is fixed-term, the property is to be sold with the tenants and the tenancy in place, meaning the landlord can’t make their tenants move out until the term is over. The new owner will take over the tenancy agreement and serve as a new landlord. Alternatively, both the tenant and the landlord can try to agree to end the fixed-term early.

If the tenant is on a periodic agreement, and the purchaser wants to move in right away, proper notice of at least 42 days will have to be given to the tenant.

10. Mortgagee sale

If the property owner fails to make necessary loan repayments on their investment property and defaults on their mortgage, the bank can sell their property to get back the money owed. When the bank takes possession of the property, they become the new landlord. With a mortgagee sale the bank is given special rights and can give notice to end both periodic and fixed tenancies.

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