Ending a tenancy correctly

With the current rates conditions and home loans becoming
more achievable there are many tenancies ending.

Bear in mind that a Tenancy must be concluded correctly
in order for there to be no further actions in the future.

Tenancy agreements can only be
ended in accordance with the
Residential
Tenancies and Rooming Accommodation Act 2008
(the
Act). There are processes that must be followed to correctly end an agreement,
including using the approved form and allowing the right amount of time for the
notice period.

Some ways a tenancy agreement can
be ended:

  • the lessor/agent and tenant both
    agree, in writing, for the agreement to end
  • the lessor/agent gives the tenant
    a Notice to leave (Form 12) or Abandonment termination notice (Form 15) to the
    tenant
  • the tenant gives the lessor/agent
    a Notice of intention to leave (Form 13)
  • the tenant is given a Notice to
    vacate from mortgagee to tenant (Form 19) from a mortgagee (e.g. a bank) who is
    entitled to take possession of the premises
  • the sole tenant has died and the
    tenancy must be ended, or
  • the Tribunal makes an order.

Even fixed term agreements must
be formally ended by giving a written notice, otherwise they continue as a
periodic agreement.

Reasons for ending an agreement

Agreements can be ended for one
of the following reasons:

  • Without grounds (no reason given)
    • Either party can end an agreement
      (a fixed term or a periodic), without giving a reason. However, a fixed term
      agreement cannot be ended before the agreement’s end date, unless both parties
      agree.
    • The lessor/agent must give the
      tenant two months notice. The tenant must give the lessor/agent two weeks
      notice.
  • Non-liveability
    • Either party can end the
      agreement if the premises are partly or wholly destroyed or if they can no
      longer be used legally as a dwelling. This does not apply if the
      non-liveability is caused by one of the parties breaking the agreement e.g. by
      causing extensive damage.
    • The notice must be given within
      one month of the premises becoming non-liveable and the agreement ends on the
      day the notice is given.
  • Employment, or entitlement to
    occupy under employment, ended

    • The lessor/agent may end a
      tenancy that arises under the tenant’s terms of employment, subject to any
      relevant industrial award or agreement.
    • The lessor/agent must give four
      weeks notice.
  • Abandoned premises
    • The lessor/agent can either give
      a notice to the tenant or apply to the Tribunal to end the agreement if they
      believe, on reasonable grounds, the premises have been abandoned.
    • The lessor/agent must give seven
      days notice or the Tribunal can determine the end date.
  • Sale of premises
    • The lessor/agent can end a
      periodic agreement if the lessor has entered into a contract to sell the
      premises with vacant possession. However, they cannot end a fixed term
      agreement before the end date, unless the tenant agrees.
    • The tenant can end the agreement
      if the premises are for sale within the first two months of the tenancy
      starting and they had not been informed in writing at the time they signed the
      agreement. The tenant has until two weeks after the first two months of the
      tenancy to advise they want to leave.
  • Breach of agreement
    • Either party can end the agreement
      if the other party does not remedy a breach after the
      Notice to remedy breach (Form 11)
      process has been followed.
    • The lessor/agent must give seven
      days notice to leave for rent arrears, or 14 days notice to leave for general
      breaches. The tenant must give seven days notice of their intention to leave.
  • Mortgagees in possession
    • A mortgagee, such as a bank or
      financial institution that is entitled to take possession of the premises, can
      give the tenant at least two months notice and end a periodic or fixed term
      agreement if it has not agreed to the tenancy. If it has agreed, it can end a
      periodic agreement with two months notice, but cannot end a fixed term
      agreement earlier than the end date unless the tenant agrees.
  • Death of a sole tenant
    • If a sole tenant dies, the
      tenant’s personal representative or relative can negotiate with the
      lessor/agent to end the tenancy. The date the agreement ends depends on the
      action taken. If a written notice is used, the tenancy ends two weeks after the
      notice is received. If the parties agree on another end date, the tenancy will
      end on that date. If no notice is given or no agreement made, the tenancy ends
      one month after the tenant’s death. The Tribunal can determine the end date if
      required.

Terminations by Tribunal

The lessor, agent or tenant can
apply straight to the Tribunal for a decision about when a tenancy agreement
should end, but only for certain reasons, and only after correct processes have
been followed. These are called urgent applications and reasons include:

  • failure to leave – if the tenant hasn’t left the
    property by the due date on the notice
  • hardship – if either party believes they would
    suffer excessive hardship
  • damage or injury – if the tenant has damaged the
    premises or injured people
  • objectionable behaviour – if the tenant uses verbal
    abuse, harassment or causes a serious nuisance, and
  • repeated breaches – for repeating a serious breach
    more than twice in a one year period, even though the breach was fixed
    each time.

Retaliatory terminations prohibited

The lessor/agent must not end an
agreement by giving the tenant a
Notice
to leave
without grounds because the
tenant has exercised their lawful rights. In this case, the tenant may apply to
the Tribunal within four weeks of receiving the notice.

Disputes about ending agreements

The RTA encourages
self-resolution of disputes about
ending agreements that are not classified as urgent applications. Parties
should attempt to resolve the dispute themselves by talking to each other and
finding out about their rights and responsibilities. If they cannot reach an
agreement, the parties may get assistance by lodging a
Dispute resolution request(Form
16) with the
RTA’s dispute resolution service.
If no agreement is reached, the RTA will issue a Notice of unresolved dispute.
At this point, either party can apply to the Tribunal for a decision.

Compensation

A person may apply to the
Tribunal for compensation to cover damage or loss caused by the other party
breaching the terms of the agreement. Persons seeking compensation must try to
avoid or minimise their own loss. Applications to the Tribunal must be made
within six months of becoming aware of the breach occurring. This is not an
urgent application, so parties must go through the RTA’s dispute resolution
service before applying to the Tribunal

Source:
Real Estate Dynamics + RTA website April 2015

Real Estate Dynamics Property News –
April2015