What was the outcome of Tenancy Tribunal case 5043388?

The tribunal order states: The tenants’ application is dismissed.

How much money was awarded in case 5043388?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 5043388?

The dispute type was not classified.

Where can I read the official tribunal order for case 5043388?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/11142606-Tenancy_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 5043388?

The tribunal order states: The tenants’ application is dismissed.

How much money was awarded in case 5043388?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 5043388?

The dispute type was not classified.

Where can I read the official tribunal order for case 5043388?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/11142606-Tenancy_Tribunal_Order.pdf.

Unit/Flat 1, 386 Richmond Road, Grey Lynn, Auckland 1021 Tenancy Tribunal Case 5043388 — Tenancy dispute

Order

The tenants’ application is dismissed.

Reasons

Both parties attended the hearing by telephone.
The tenants have applied to the Tribunal for an order reducing the term of their fixed term tenancy under section 66 Residential Tenancies Act 1986 (“RTA”).
In determining the tenants’ application, the standard of proof is “on the balance of probabilities”. In other words, the tenants must establish with evidence that their claim is more likely than not.
Contemporaneous documents such as emails and texts are helpful in making factual findings, especially where facts are disputed.
While I have not referred to all the evidence presented at the hearing, the parties can be assured that it has all been considered. In the interests of conciseness, I have referred in this Order only to the most relevant or important evidence.
By accepting the evidence of one person over that of another person, it is not because the Tribunal does not believe the first person’s evidence. Instead, the Tribunal has determined that the evidence of the other person is more likely and may be supported by other evidence that makes it more likely.
It is for an applicant to provide the evidence necessary to prove their claims. It is not the Tribunal’s responsibility to extract evidence. Background
The parties agree on the following facts: a. The parties entered into a fixed term tenancy from 17 February 2024 to 17 February 2025. b. The tenants found a property to purchase which exactly suited their needs. They made an offer that was accepted with an extended settlement date. c. The tenants advised the Property Manager (“PM”) on 2 September 2024 that they wished to be released from their fixed term tenancy from early November 2024. They agreed to meet the landlord’s reasonable expenses in arranging a new tenancy. The tenants were willing to be flexible over the exact end date to coincide with the start of a new tenancy and, ideally, the settlement date for their purchase. d. The PM arranged to have photographs taken for advertising purposes. e. In early October 2024 the tenants made enquiries of the PM regarding progress as they had not seen any advertisement for the property. f. The PM advised that the landlord had now decided to sell the property. The tenants co-operated fully with the selling agent in arranging for photographs to be taken and allowing open homes. g. The tenants believed that the landlord had agreed to the tenancy ending in early November 2024. When informed by the PM that the landlord was insisting on the tenants being liable for rent until settlement of the sale, the tenants felt that the goodwill they had fostered was lost. They therefore denied the selling agent further access. h. The landlord then decided not to sell the property until the end of the fixed term tenancy and instructed the PM to find a new tenant, but on a fixed term to 17 February 2025, the end of the tenants’ fixed term. i. The landlord has not been able to find a new tenant to date.
The PM gave evidence that: a. It was a practical decision to advertise the tenancy only a month from the proposed start date of a new tenancy, as prospective tenants are looking for properties to move into in no more than a month. Other than taking the photographs and seeking the landlord’s instructions, no steps were taken to re-let the property during September. b. The landlord had decided to sell the property as the proceeds were required to meet the landlord’s liability for the purchase of another property in Tauranga. c. The landlord instructed the PM that the property was only to be let for a short-term tenancy to 17 February 2025 as the landlord intended to put the property back on the market. This has made it difficult to re-let. d. The landlord had agreed to release the tenants from their fixed term tenancy upon the property the date that a new tenancy started or the settlement date of the sale of the property. She denied that she or the landlord had come to any other agreement regarding ending the fixed term on any other terms.
The tenant provided evidence as follows: a. In an email to the landlord dated 3 September 2024, the PM confirmed: “[The tenants] are aware they are breaking their lease - I told them I would confirm with you, however usually we are happy for tenants to break their lease ONCE we have new tenants secured.” b. An email from the landlord to the PM on 3 September 2024 instructing her to proceed with trying to find a new tenant on the basis that no pets would be allowed and the tenants would be responsible for water rates. These are changes from the tenancy agreement terms between the parties. c. In an email of 4 October 2024 from the PM to the tenants, the PM advises: “Unfortunately, [the landlords] have changed their position and are no longer happy to release you on the 7th November.” d. An email of 4 October 2024 from the landlord to the PM giving instructions: “Just to clarify, we have not and are not agreeing to release the tenance [sic] from their tenancy agreement. As per your email, we will be amenable to release them from the agreement ONCE we have either sold the property and it has become unconditional or failing that until we have found a new suitable tenant with a signed agreement.”
The tenants claim that the landlord has put them in a difficult position because they are paying both mortgage payments and rent. They believed that they had an agreement with the landlord that the fixed term had been reduced to end in early November 2024 and that the landlord changed their mind and resiled from that agreement. Decision
The usual legal position with a fixed-term contract is that the term of the contract will be applied strictly and it is only in limited circumstances that a court or tribunal will interfere with it. For residential tenancies, one of those circumstances is found in section 66 RTA, which allows for the reduction of fixed term tenancy agreements.
There is a high threshold to be met before the Tribunal will reduce the term. The Tribunal will not lightly set aside a fixed term tenancy entered into by mutual agreement between the parties. The burden of proof is on the applicant to establish that the fixed term should be reduced by the Tribunal.
The applicant will need to establish that: a. There has been a change in their circumstances. b. The change was unforeseen. c. The unforeseen change will result in severe hardship to the applicant if the tenancy is not reduced. d. The severe hardship the applicant will suffer if the term is not reduced exceeds the hardship the other party will suffer if the term is reduced.
To be successful the applicant must first establish that their circumstances have changed during the tenancy. In this case, the tenants voluntarily changed their circumstances by buying a house. They have put themselves in the position of hardship where they are liable for both mortgage payments and rent.
The tenants may not have expected to buy a property after entering into a fixed term tenancy agreement, but this is not an unexpected change of circumstances as contemplated by section 66 RTA. Section 66 RTA contemplates situations outside the tenant’s control such as redundancy, job relocation or ill health.
The tenants have failed to establish the first essential requirement of section 66 RTA that there has been an unforeseen change in the tenants’ circumstances. On the contrary, the tenants brought about that change of circumstances. The tenants’ application must be dismissed on this basis.
In the absence of documentary evidence of the tenants’ hardship - such as details of income and expenditure - it is not possible for the Tribunal to form an assessment of whether their hardship exceeds that of the landlord. For this additional reason, the tenants’ application must also be dismissed.
It appeared at the hearing that the tenants were claiming that the landlord’s reneging on their agreement with the tenants over ending the tenancy was an unforeseen change of circumstances that has caused the tenants hardship in servicing a mortgage and paying rent.
The email of 3 September 2024 between the PM and the landlord relied on by the tenants, does not confirm any agreement other than that the lease can be “broken” once new tenants have been “secured”. The email of 4 October 2024 refers to an agreement to release the tenants on 7 November but the email from the landlord makes it clear that the agreement was that contained in the PM’s email to them of 3 September: that the tenants would only be released from the fixed term from when the property was sold or re-let.
The Tribunal is not satisfied on the evidence before it that the tenants have proven on the balance of probabilities that the terms of the agreement between the parties was that the tenants would be released from their fixed term on 7 November or thereabouts. The tenants accepted that the end date of the lease agreed with the landlord was flexible to accommodate the start of a new tenancy or settlement date of sale.
It is unusual that such an important agreement was not recorded in writing by an exchange of emails. The emails provided in evidence indicate that the agreement was that while both parties would work towards ending the tenancy in early November, the tenants would be liable until the start of a new tenancy or settlement of the sale of the property.
The Tribunal being unable to find that the agreement reached between the parties was that claimed by the tenants means that the alleged breach of the agreement by the landlord cannot constitute an unforeseen change of circumstances. The tenants’ claim is dismissed on this ground as well.
As noted during the hearing, the tenants may have a claim against the landlord for failing to mitigate their loss in the way the landlords have conducted themselves over the sale and re-letting. See section 49 RTA and the District Court’s decision of Davies v Clarke and Snead [2017] NZDC 21608.

Tenancy Tribunal case 5043388 — Tenancy dispute at Unit/Flat 1, 386 Richmond Road, Grey Lynn, Auckland 1021

At a glance

Claims & awards

Tenancy Tribunal case 5043388 — Tenancy dispute at Unit/Flat 1, 386 Richmond Road, Grey Lynn, Auckland 1021

At a glance

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Property management

Frequently asked questions

Order

Reasons

Topics & place

Residential Tenancies Act sections

Property management

Frequently asked questions