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Ending a fixed-term tenancy to sell

Tuesday, January 12, 2021
IMG SOURCE: UPSLASH 

This week's question comes from Rob (paraphrased):  

I want to sell a property that is currently subject to a fixed-term tenancy (term expiring 22nd February 2021). I need some downtime between the tenancy and the listing to tidy up the property. In light of the RTAA, what notice should I give to terminate the tenancy? Also, for the first time, the tenant had missed a rent payment, if I give notice now would that be considered retaliatory?

On the appropriate notice to give in this instance

A termination notice would not be necessary. Seeing that the fixed-term tenancy predates 11 February 2021 and that we are now squarely within the 90-21 days before the end of the term window, Rob can simply give a written notice to discontinue the tenancy once the term expires. Filling out and serving this Tenancy Services template notice will suffice. Note that Rob will not be terminating the tenancy but rather stopping it from rolling into a periodic tenancy at the end of the term. All fixed-term tenancies that pre-date 11 February 2021 can be dealt with in this fashion until 11 February 2022. 

For fixed-term tenancies that postdate 11 February 2021 the options open to a landlord wishing to sell are

  • Landlord and tenant both agree to end of fixed-term early; or
  • Landlord and tenant both agree to discontinue the tenancy at the end of the term; or
  • Landlord to sell the property with the tenant in situ; or
  • Landlord to give a 90-day notice to terminate so as to put the property on the market to sell so long as the following conditions are met:
    • That the fixed-term tenancy has already rolled into a periodic tenancy on the day the notice would take effect; 
    • That the property is listed on the market for sell or other disposition 90-180 days after the termination notice; and 
    • That the termination notice is formed, formatted and served according to the requirements set out in the Residential Tenancies Act (RTA). 

or

  • Landlord to give a 90-day notice to terminate if the property is under an unconditional sale and purchase agreement requiring vacant possession for the buyer so long as the following conditions are met: 
    • That the fixed-term tenancy has already rolled into a periodic tenancy on the day the notice would take effect; and
    • That the termination notice is formed, formatted and served accordingly to the requirements set out in the RTA. 
But as stated above, the most straightforward solution for Rob in this instance is not to terminate (early) but to discontinue. 

On whether Rob's notice would be considered retaliatory under the RTA

Absolutely not. 

A few reasons/salient points about retaliatory notice (s54 of the RTA) to note:

  • A notice can only be scrutinised for signs of retaliation if it is a termination notice that complies with either s51 or s66U that is served correctly. Rob's notice is not a termination notice; 
  • The RTA's retaliatory provisions protect tenants who, as a result of having asserted/insisted on a right under the tenancy agreement or the RTA got served an s51/s66U termination notice by the landlord. By not paying rent, Rob's tenant hasn't asserted a right. In fact, she has breached the tenancy agreement and the RTA. 
There is a whole lot more we can go into about retaliatory notices but for Rob's purpose, we'll leave it there for now. 

In our experience supporting APIA landlords, we have noticed a lot of misinformation out there surrounding retaliatory notices that are often disruptive to the landlords' ordinary business process. We have made an in-depth video on retaliatory notices and recommend all members to take the time to watch here.

Do you have any tenancy related questions? Write to us at admin@apia.org.nz or hit us up on our social channels here and here.


 

 

 

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