We have a property where we will be notifying the tenants that we are not extending the tenancy when the FTT ends. It started last year.

One of the current tenants has said that they want to rent it. We are happy with that.

We opted not to increase our rents last year because some of the tenants were struggling post COVID.

So my question is:

If we take one of the current tenants on as tenants, is it an extension of the current tenancy? (As a periodic)
Or
Has it been assigned?
Or
Is it a completely new tenancy?

We would look to increase the rent when the old tenant takes the tenancy on. Can we do that?

If not, can we increase the rent 6 months later?

Thanks in advance!

princess52 - 2021-04-23 20:32:00

Whole new deal, the old ft expired, would have thought.

gabbysnana - 2021-04-24 08:15:00

Thanks. Bumping for other opinions

princess52 - 2021-04-24 15:48:00

I'd expect that in the event of a dispute, a Court or the Tenancy Tribunal would see it as an attempt at avoiding your legal obligations and would likely say that it was an extension. That principal certainly applies in employement law.

Wouldn't it be easier to get a new tenant and not take the risk?

tegretol - 2021-04-24 18:38:00

Fixed term becomes periodic when the fixed term ends.
Very hard to get rid of them then.
You have to have given them notice 90 days before the end.
If you want one of them to stay, you will have to sign them up as a new agreement.

bernie184 - 2021-04-24 18:52:00

I have taken over a flatmates tenancy before. No problems there.

But? The OP wants the current tenants to move out, but wants one of the people currently living there to take over the tenancy. Is this correct?

marte - 2021-04-24 20:57:00

marte wrote:

I have taken over a flatmates tenancy before. No problems there.

But? The OP wants the current tenants to move out, but wants one of the people currently living there to take over the tenancy. Is this correct?

yes. One of the current tenants wishes to rent the property

I’m trying to work out when we can increase the rent.

We can either:
Sign the potential new tenant into a new TA

Or
Take them as an assigned tenant

Or
Just continue the current tenancy as a periodic with the new tenant

If we sign a new tenancy we could increase the rent. If we roll over to periodic or it’s assigned then can we increase the rent 6 months later?

princess52 - 2021-04-24 22:17:00

Tenancy Services has just updated their website following several requests for clarification of very confusing rules. (Including multiple requests from me). Quite a bit of discussion on the topic on the big PI Facebook page.

Does this help?

https://www.tenancy.govt.nz/ending-a-tenancy/expiry-of-a-fix
ed-term/

artemis - 2021-04-25 08:22:00

Did you let the tenant that wants to rent in the future, know that the rent will be increased? They might change their mind about it then. Also, what are the chances that the tenant that wants to stay on, will take whoever you are not happy with (is this why you aren't extending? It's not clear)-but what if they take whoever you aren't happy with, as a flatmate? If you aren't extending, you still need to give them notice of not extending-it's a weird rule, but if you don't do it, they can complain.

evoalg - 2021-04-25 09:03:00

evoalg wrote:

Did you let the tenant that wants to rent in the future, know that the rent will be increased? They might change their mind about it then. Also, what are the chances that the tenant that wants to stay on, will take whoever you are not happy with (is this why you aren't extending? It's not clear)-but what if they take whoever you aren't happy with, as a flatmate? If you aren't extending, you still need to give them notice of not extending-it's a weird rule, but if you don't do it, they can complain.

We have heard from the current tenant who has been there from the beginning, that she doesn’t want to continue with the tenancy when the FTT expires. It’s too early to give the 90 days notice from our end yet. But they are aware that the current tenancy won’t roll over or be extended.

We are still under the old rules as the FTT started last year.

There is only one of the original tenants left. The tenant who wants to take it on has been good to deal with.

princess52 - 2021-04-25 13:53:00

artemis wrote:

Tenancy Services has just updated their website following several requests for clarification of very confusing rules. (Including multiple requests from me). Quite a bit of discussion on the topic on the big PI Facebook page.

Does this help?

https://www.tenancy.govt.nz/ending-a-tenancy/expiry-of-a-fix
ed-term/

thanks artemis will have a read

princess52 - 2021-04-25 13:54:00

princess52 wrote:

We have heard from the current tenant who has been there from the beginning, that she doesn’t want to continue with the tenancy when the FTT expires. It’s too early to give the 90 days notice from our end yet. But they are aware that the current tenancy won’t roll over or be extended.

We are still under the old rules as the FTT started last year.

There is only one of the original tenants left. The tenant who wants to take it on has been good to deal with.

End the old FTT and restart a new one with the new Tenant to be kept on.

sparkychap - 2021-04-25 14:31:00

Thanks all for your comments. My question is about increasing the rent.

Another way of looking at what I’m asking is:

Can we increase the rent after the new tenant has been there 6 months?

The reason I am asking is because of the amendments and only being able to increase the rent annually.

I want to know if it’s legal to increase the rent after 6 months as long as the next increase after that is no more than annually

princess52 - 2021-04-25 15:32:00

At the moment annual rent increases relate to a tenancy but not to the rental property. There is apparently discussion under way about tying annual increases to the property but has not happened yet. So I would say a new tenancy agreement can increase the rent, regardless of when the previous increase was.

In this case looks like the existing tenancy agreement continues using the Change of Tenant process. So in that case the next increase is one year from the previous one. I think that would also be the case with a tenancy assignment under the new assignment rules.

Just my opinion. The rules are getting stupider and stupider, also my opinion.

artemis - 2021-04-25 15:46:00

princess52 wrote:

Thanks all for your comments. My question is about increasing the rent.

Another way of looking at what I’m asking is:

Can we increase the rent after the new tenant has been there 6 months?

The reason I am asking is because of the amendments and only being able to increase the rent annually.

I want to know if it’s legal to increase the rent after 6 months as long as the next increase after that is no more than annually

It is a new tenancy so the rent will be started when the contract is signed.
Personally l would be ending the tenancy at the end of the fixed term.
The resigning with the one tenant as if it is a totally new tenancy.
You can then put the new rent in place and not worry for another year.
That to me is the cleanest way to do it.

bernie184 - 2021-04-25 18:21:00

bernie184 wrote:

It is a new tenancy so the rent will be started when the contract is signed.
Personally l would be ending the tenancy at the end of the fixed term.
The resigning with the one tenant as if it is a totally new tenancy.
You can then put the new rent in place and not worry for another year.
That to me is the cleanest way to do it.

There is a big advantages to continuing with the existing FTT if that is possible, as under most circumstances it retains the 'old' termination rules if continued /renewed /extended. So simple (not).

artemis - 2021-04-25 18:35:00

artemis wrote:

At the moment annual rent increases relate to a tenancy but not to the rental property. There is apparently discussion under way about tying annual increases to the property but has not happened yet. So I would say a new tenancy agreement can increase the rent, regardless of when the previous increase was.

In this case looks like the existing tenancy agreement continues using the Change of Tenant process. So in that case the next increase is one year from the previous one. I think that would also be the case with a tenancy assignment under the new assignment rules.

Just my opinion. The rules are getting stupider and stupider, also my opinion.

that makes sense. Thanks again.

The rent hasn’t been increased for over a year for this property and not since the current tenants took the tenancy.

Edited by princess52 at 7:41 pm, Sun 25 Apr

princess52 - 2021-04-25 19:39:00

artemis wrote:

There is a big advantages to continuing with the existing FTT if that is possible, as under most circumstances it retains the 'old' termination rules if continued /renewed /extended. So simple (not).

But when that FTT runs out, it becomes periodic.
So keep it going till then, then start a new contract.

bernie184 - 2021-04-25 21:41:00

You can add an annual rent review into the FTT contract.

pcle - 2021-04-25 21:55:00

bernie184 wrote:

But when that FTT runs out, it becomes periodic.....

Not necessarily.

artemis - 2021-04-26 05:50:00

artemis wrote:

Not necessarily.

How so?
My understanding is that when a fixed term finishes they become periodic.
But having sold the last of our rentals recently, l haven't followed the details as closely as l would have.

bernie184 - 2021-04-26 09:52:00

bernie184 wrote:

How so?
My understanding is that when a fixed term finishes they become periodic.
But having sold the last of our rentals recently, l haven't followed the details as closely as l would have.

If entered into before 11 Feb the FTT can be extended by agreement with both parties under most of the old rules. Implied is that extensions can keep happening indefinitely by agreement. This was extremely unclear but Tenancy Services has sort of clarified now.

artemis - 2021-04-26 11:56:00

artemis wrote:

If entered into before 11 Feb the FTT can be extended by agreement with both parties under most of the old rules. Implied is that extensions can keep happening indefinitely by agreement. This was extremely unclear but Tenancy Services has sort of clarified now.

makes sense to me.

princess52 - 2021-04-26 13:39:00

artemis wrote:

If entered into before 11 Feb the FTT can be extended by agreement with both parties under most of the old rules. Implied is that extensions can keep happening indefinitely by agreement. This was extremely unclear but Tenancy Services has sort of clarified now.

Thanks for that.

bernie184 - 2021-04-26 18:02:00