Fixed Term Rentals
Oct 21st 2009, 11:35 pm
#1
Cow on the Beach
Thread Starter
Joined: Aug 2008
Location: Seatoun, Wellington
Posts: 699
Fixed Term Rentals
Just a word of warning, especially for newbies, regarding Fixed term rental contracts.
A lot of rentals are now insisting on 12 month fixed term contracts particularly for ‘family sized’ homes.
I know it seems obvious but these whilst these contracts do give you certainty of tenure for the period and indeed no rent increases, if for whatever reason you need to get out of them ‘There is no provision for either the landlord or the tenant to give notice to quit’.
‘If unexpected circumstances mean a landlord or tenant wishes to end a fixed-term tenancy early, then they may apply to the Tenancy Tribunal to end the tenancy. The Tenancy Tribunal may shorten the tenancy if there has been an unforeseen change in the applicant’s circumstances and if the hardship caused to the applicant by the tenancy continuing would be greater than the hardship caused to the other person by the tenancy ending. The Tribunal can also order compensation to be paid.
Add to this that some contracts have a ‘no sub-letting clause’ and you may be stung for the whole term of the contract. This is particularly a problem when the landlord does not want to continue letting after the current contract. In these cases you will find it difficult to find a ‘follow-on’ tenant for a short period remaining on the tenancy.
My advice would be where possible to insist that sub-letting be allowed (in this case you have to ask the landlord for consent to sub-let but this consent may not normally be denied) and/or a clause written in to allow you to find a ‘follow-on’ tenant.
Additionally I would advise you to consider what the availability of rental properties would be like at the end of the fixed term (in our case dumbly the middle of the summer holidays when new rentals are scarce). If you can get the fixed term length altered to coincide with a good time to get new rentals (Oct-early Dec., mid-Feb – April).
Remember fixed term is just that fixed…so think about the end of the contract not just the beginning.
A lot of rentals are now insisting on 12 month fixed term contracts particularly for ‘family sized’ homes.
I know it seems obvious but these whilst these contracts do give you certainty of tenure for the period and indeed no rent increases, if for whatever reason you need to get out of them ‘There is no provision for either the landlord or the tenant to give notice to quit’.
‘If unexpected circumstances mean a landlord or tenant wishes to end a fixed-term tenancy early, then they may apply to the Tenancy Tribunal to end the tenancy. The Tenancy Tribunal may shorten the tenancy if there has been an unforeseen change in the applicant’s circumstances and if the hardship caused to the applicant by the tenancy continuing would be greater than the hardship caused to the other person by the tenancy ending. The Tribunal can also order compensation to be paid.
Add to this that some contracts have a ‘no sub-letting clause’ and you may be stung for the whole term of the contract. This is particularly a problem when the landlord does not want to continue letting after the current contract. In these cases you will find it difficult to find a ‘follow-on’ tenant for a short period remaining on the tenancy.
My advice would be where possible to insist that sub-letting be allowed (in this case you have to ask the landlord for consent to sub-let but this consent may not normally be denied) and/or a clause written in to allow you to find a ‘follow-on’ tenant.
Additionally I would advise you to consider what the availability of rental properties would be like at the end of the fixed term (in our case dumbly the middle of the summer holidays when new rentals are scarce). If you can get the fixed term length altered to coincide with a good time to get new rentals (Oct-early Dec., mid-Feb – April).
Remember fixed term is just that fixed…so think about the end of the contract not just the beginning.
