Fixed-Term Tenancy in NZ: Can You Leave Before It Ends?

Fixed-term tenancies in New Zealand can feel like a sure and solid plan, until circumstances change. May it be for a job relocation, a relationship change, or an unlivable rental, many landlords and tenants find themselves wondering in this situation: can you end a fixed term tenancy early?

The answer is not simply straightforward, so being informed on New Zealand tenancy regulations and processes can save you from haggled decisions or legal trouble. In this guide, we break down fixed-term tenancy rules, options, and remedies.

Key takeaways

• A fixed-term tenancy is one where start and end dates are clearly defined in the agreement

• It cannot be ended early, but exceptions are made for parties in mutual agreement, with successful tenancy reassignment, or in the process of sorting out family violence.

• Situations such as physical assault by the tenant and severe hardship also count.

• Tenants must maintain eager communication with landlords to settle a possible early exit and keep proper documentation of needed files to strengthen their case.

What is a fixed-term tenancy?

According to the Residential Tenancies Act 1986, a fixed-term tenancy is one with clearly stated start and end dates in the agreement. During this time, both tenant and landlord are legally bound to the terms until expiry. There is no maximum duration set by law, but fixed terms typically last at least 90 days to a year.

For comparison, a periodic tenancy has no defined end date and continues until either the tenant or landlord gives valid written notice to end it. Fixed-term tenancies automatically become periodic when neither party provides a notice near the end of the agreement.

Can you end a fixed-term tenancy early?

Generally, neither the landlord nor the tenant can end a fixed-term tenancy early. However, some legal situations have come up as exceptions to this rule:

1. Mutual agreement

Both the landlord and tenant can mutually agree in writing to break the lease. A new agreement will be released with the new conditions upon early exit. The landlord may also charge actual and reasonable fees related to the sudden termination, such as advertising and screening costs.

2. Assignment of tenancy

A tenant may request to assign (transfer) their fixed-term tenancy to another person. If the landlord agrees, the new tenant continues the remaining term of the lease with either the same or new established conditions. Landlords are also required under the law to consider all reassignment requests and must not unreasonably decline them.

Say for example, tenant A received a job offer in another city halfway through his one-year lease. He found tenant B who was willing to take over the rental, and the landlord approved this transfer. Since both parties mutually agreed in writing, tenant A was able to legally exit the fixed-term agreement early.

If a guarantor is involved in your tenancy, it’s important to understand how their obligations carry over or end during reassignment — learn more here.

3. Family violence

An occupant or their dependent who is experiencing family violence while still a tenant of the premises can terminate the agreement provided they submit at least 2 days’ written notice in the approved form, along with qualifying evidence of the violence. 

This protection applies to both fixed-term and periodic tenancies, allowing tenants to end their lease without financial penalty, landlord approval, or a Tenancy Tribunal application. These rights are protected under Section 56B of the Residential Tenancies Act 1986. 

4. Physical assault by tenant

If a tenant has physically assaulted his landlord, the owner, a family member, or an agent, a landlord can proceed with at least 14 days’ written notice in approved form for termination of tenancy and at least one form of evidence of the assault. Similar to family violence regulations, Tenancy Tribunal applications or pending charges are not immediately required.

5. Severe hardship

Should there be an unexpected change in circumstances, a landlord or tenant can apply to the Tenancy Tribunal to end the fixed-term tenancy early. A favoured decision will then be given if it finds that continuing the tenancy would cause severe hardship to the applicant and that this hardship is deemed greater than the other party’s if the tenancy ends early. 

Included in the common cases fileable under severe hardship are medical emergencies, job loss, great income reduction, significant rent increase, or death of a household member. Be reminded that these situations do not immediately guarantee a positive decision from the Tribunal; It has the discretion to weigh the case accordingly.

To give you a real-life example: Tenant A, halfway through his tenancy, had received news of a relative outside town being diagnosed with an urgent illness that requires full-time care. As the only immediate family, A cannot stay in his current area while trying to keep a job, pay rent, and look over for his relative’s expenses. 

He may decide to apply for an early termination, and provide proper documentation to strengthen his case, such as medical certificates, evidence of financial strain, and proof of attempts to reassign the tenancy. Only then will the Tenancy Tribunal decide if a favourable ruling will be given to Tenant A.

What are the rules for fixed-term tenancy in NZ?

Understanding the rules helps prevent legal pitfalls. Here are the key points:

Automatic conversion

If no notice is given, a fixed-term tenancy usually becomes periodic when it ends, unless:

• The parties agree otherwise, or

• The tenancy agreement says it will end at the expiry date.

So sometimes no action is needed, but not always

Effective period

Ending a tenancy near its expiry requires a written notice to be issued no earlier than 90 days before the fixed-term expiry and no later than 21 days before the end date. This rule is applicable to both landlords and tenants. The landlord does not need a justifiable reason for termination during the effective period.

Rent increases

Rent can only be increased in a fixed-term tenancy if clauses in the agreement allows it and and at least 12 months have passed since the last increase.. 

Can you end a fixed term tenancy early? plan your exit right

As long as you’re informed from the start, knowing how and when you can end a fixed term tenancy early will protect your rights and give you peace of mind. If you find yourself in a bind, start by planning your exit ahead and communicating openly with the parties involved. Ending your lease early may not be as simple as walking away, but when equipped with the right tools, it is possible. 

Need help ending a fixed-term tenancy early?

We’re experts in New Zealand tenancy law and can guide you through your options, whether you’re dealing with hardship, relocation, or safety concerns. Talk to our property specialists today

Frequently asked questions

What other situations may count as severe hardship?

Aside from significant rent increase, job loss and medical emergencies that can prevent continued tenancy also counts as severe hardship. However, these cases are still resolved according to their specific circumstances and do not guarantee an affirmative outcome. The Tenancy Tribunal will still compare your situation with the landlord’s before coming up with a decision.

Can I move out early but keep paying rent?

If the landlord agrees with this setup, you can move out, provided you continue to pay for rent and bills until the fixed term ends or a new tenant is secured. Sometimes landlords will refuse this option if they want a paying, occupying tenant.

Can I refuse a rent increase during my fixed-term lease?

Yes, rent increase during a fixed-term lease is only permissible if clearly written into the agreement. Unlike in a periodic tenancy, your landlord cannot decide to raise the rent midway through the term if it was not discussed in your conditions.