understanding fixed term tenancy

Understanding Fixed-Term Tenancy in NZ: A Landlord's Guide

easySale

easySale

— 11 min read
Understanding Fixed-Term Tenancy in NZ: A Landlord's Guide

A fixed-term tenancy is a rental agreement with a set start date and a set end date. In New Zealand, neither you nor your tenant can simply give notice and leave part-way through. If you are a landlord who may need to sell, move back in or free up cash, that one fact shapes every decision that follows.

This guide explains how fixed-term tenancies work, what happens on the expiry date, and what your options are if you want to sell while a tenant is still locked in. It is written for landlords, but tenants will find the rules useful too.

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TL;DR

  • A fixed-term tenancy runs for the period in the agreement. Neither side can generally give notice to end it early, apart from a few limited exceptions.
  • Unless someone gives valid written notice in the “effective period” (from 90 days to 21 days before expiry), the tenancy rolls into a periodic tenancy.
  • Selling the property does not end a fixed-term tenancy. The new owner takes over as landlord on the same terms.
  • If you want to sell with vacant possession, you have three realistic routes: agree an early exit with your tenant, time the sale to the expiry date, or sell with the tenant in place.

Table of Contents

What a fixed-term tenancy actually is

A fixed-term tenancy lasts for the length of time written in the tenancy agreement. Twelve months is common, but the agreement can be shorter or longer. The key feature is certainty. The tenant has the right to stay for the whole term, and you have the right to receive rent for it, as long as both sides keep to the agreement.

Compare that with a periodic tenancy, which has no end date and carries on until someone ends it with the correct notice. Tenancy Services, the government body that explains the rules, sets out the differences between the two types so landlords and tenants can choose the one that suits them.

The law itself is the Residential Tenancies Act 1986. Its definition of a fixed-term tenancy is, in simple terms, a tenancy for a fixed term, with some exceptions for tenancies that can be ended by notice. You can read the wording in the Act as it currently stands.

What a fixed-term tenancy actually is — overview diagram

Why landlords choose fixed terms

Most landlords pick a fixed term for predictability. You know what rent is coming in, you avoid the cost of re-letting every few months, and a good tenant is committed to staying. For tenants, the benefit is security: they cannot be asked to leave at short notice during the term.

Why they sometimes backfire

A common assumption is that a fixed term gives the landlord more control. In practice it works the other way. Tenancy Services points out that fixed terms limit a landlord’s ability to end the tenancy for reasons such as selling the property. If there is any chance you will sell or move back in within the next year, that matters before you sign.

Fixed-term vs periodic tenancy at a glance

Fixed-term tenancy Periodic tenancy
End date Set in the agreement None
Ending early Only by written agreement, or in limited cases through the Tenancy Tribunal By giving the correct written notice
Selling the property Tenancy continues with the new owner Notice can be given so the home is vacant (for example 42 days if the buyer needs it empty)
Best for Landlords who want stable rent and a settled tenant Landlords who may sell or move in soon
Main risk Locked in if your plans change Tenant can also leave on notice

The 42-day figure for a periodic tenancy comes from the Tenancy Services page on selling a rental property, where the buyer requires a vacant home. Notice rules for tenancies were changed by legislation, so check the current wording before you act. The summary of the Residential Tenancies Amendment Act 2024 says the changes to tenancy terminations took effect on 30 January 2025.

What happens when the fixed term ends

This is where landlords most often get caught out. Many assume the tenancy simply stops on the final day. It does not.

Under section 60A of the Act, when a fixed-term tenancy of more than 90 days expires, it continues as a periodic tenancy on the same terms, unless contrary notice has been given. A fixed-term tenancy only lasts for the set time, and Tenancy Services notes it can be renewed or extended only if both landlord and tenant agree.

The effective period

The window for giving that contrary notice is called the effective period. It starts on the 90th day before the fixed term expires and ends on the 21st day before it expires, as explained on the expiry of a fixed-term tenancy page. Written notice has to be given within that window.

Here is a worked example. Say the fixed term ends on 30 June.

  1. The window opens 90 days before, which is around 1 April.
  2. The window closes 21 days before, which is around 9 June.
  3. If no valid written notice has been given by then, and nobody has signed a new agreement, the tenancy becomes periodic on 1 July.

Count the exact days from your own agreement rather than relying on these approximate dates, because the calculation depends on the precise expiry date.

What happens if you miss it

If you miss the window, the tenancy turns periodic. That can make it much harder to get vacant possession if you were planning to sell or move back in, because you now need to follow the notice rules for a periodic tenancy instead. Put the expiry date and both ends of the effective period in your calendar the day you sign the agreement.

Ending a fixed-term tenancy early

The general rule is clear: a landlord or tenant cannot give notice to end a fixed-term tenancy early. There are limited exceptions, which Tenancy Services covers on its page about ending a fixed-term tenancy early. In practice there are two routes.

By agreement

You and your tenant can agree in writing to end the tenancy early. This is by far the most common route, and it works best when you open the conversation early and honestly. Tenants often have their own reasons to move: a new job, a growing family, a better-priced home. A mutual agreement can suit both sides.

Put everything in writing, including the final day of the tenancy, the bond refund arrangements and any rent or other costs that have been agreed.

Through the Tenancy Tribunal

If continuing the tenancy would cause severe hardship, either side can apply to the Tenancy Tribunal. The Tribunal weighs the applicant’s hardship against the hardship the other party would suffer. It is a high bar, and it is not a way to get around a fixed term because you would prefer to sell. Treat it as a last resort and try to negotiate first.

Selling a rental while the tenant is on a fixed term

This is the situation many of our readers are in, so it is worth going slowly.

Selling does not end the tenancy. Tenancy Services states that if a property is sold, the tenancy continues with the new owner on the same terms and conditions, and no new agreement is needed. A landlord cannot end a fixed term early just because the property has sold.

That leaves you three realistic options.

Option 1: Sell with the tenant in place

Your buyer takes over the tenancy. This suits investors, who may be happy to inherit a tenant paying reliable rent. Your tenant has no need to move, and you avoid disputes over access and timing. The trade-off is a smaller pool of buyers, because owner-occupiers usually want an empty home.

Option 2: Agree an early exit

If you need the home empty, talk to your tenant before you list or sign anything. Be clear about your timing and ask what would make an early move workable for them. Some landlords offer help with moving costs or a short rent-free period. That is a business decision for you, and it is only worth making if the numbers stack up against the cost of waiting.

Option 3: Time the sale to the expiry date

If the buyer wants a vacant property and the tenant will not agree to leave early, Tenancy Services says you may negotiate a later settlement date or sell with the tenancy in place. If the expiry date is not far off, giving valid notice during the effective period and settling after the term ends may be the cleanest path.

The costly mistake is promising a buyer vacant possession before you have secured your tenant’s agreement. That can delay settlement or lead to disputes. Do not make the sale unconditional on vacant possession until you know the tenant is leaving.

Viewings, photos and open homes

Even when the tenancy continues, you will need access to market the property. Tenancy Services explains that landlords can enter at certain times and for certain purposes, and must give the right notice or get permission, while respecting the tenant’s reasonable peace, comfort and privacy. Tenants cannot unreasonably refuse access for a sale, but they can set reasonable conditions, such as appointment-only viewings instead of open homes.

The approach that works is to agree a schedule upfront. Offer set days and times, give plenty of notice and keep the visits short. Some landlords offer a small, temporary rent reduction as goodwill while viewings go on. Pushing for entry rarely ends well and can quickly be seen as harassment.

Our blog has more on how to handle tenants before a sale and on how to sell a house with tenants.

Our view: how we see fixed terms when a landlord wants out

We speak with property owners who are tired of their rental. Some have a damaged property after a tenancy. Some are going through a separation. Some have inherited a house they never planned to own. In almost every case, the sticking point is the same: they did not realise how much a fixed term limits their options.

Here is what we tell them.

  • Read the dates before anything else. The expiry date and the effective period decide how quickly you can realistically move.
  • Talk to your tenant first. A tenant who feels respected is far more likely to agree to a sensible early exit or to allow viewings.
  • Don’t promise vacant possession you can’t deliver. Buyers walk away or settlements slip when the tenant is still there.
  • Think about a sale with the tenant in place. It is a legitimate route, and for some owners the simplest.
  • Keep a private option open. A direct sale does not need open homes, photographers or public listing, which can take pressure off the tenant relationship.

A fixed term is not a trap. It is a commitment you made, and the best results come when you plan around it rather than against it.

— Aaron

When a direct sale can help

If your tenant is on a fixed term and you want to sell, a private sale can remove several headaches. There are no open homes for your tenant to endure, no agent commission, and you do not need to repair or tidy the house first. That is useful if the property was damaged during the tenancy and you do not want to pay for repairs just to list it.

EasySale makes cash offers on New Zealand homes in any condition, including tenanted and damaged ones, with settlement on a timeline that suits you. You can start with a no-obligation offer through our direct private sale page. If the home is run down after a tenancy, see how we handle damaged properties sold as-is.

One caution. A direct buyer who buys a tenanted home with the tenancy in place takes on the fixed term like any other buyer. If you need the property vacant, your tenant’s agreement is still needed. Talk to us early about your tenant’s situation, and we can discuss what options may suit.

Practical checklist for landlords

  1. Find your tenancy agreement. Note the start date, the expiry date and the length of the term.
  2. Work out your effective period. Count 90 days back and 21 days back from the expiry date, then add both dates to your calendar.
  3. Decide what you want. Sell with the tenant in place, sell vacant, or hold on until the term ends.
  4. Speak to your tenant. Be honest about your plans and listen to theirs.
  5. Get any agreement in writing. That includes an early end date, viewing times and any goodwill payment.
  6. Check the notice rules. If the tenancy is periodic, the rules for ending it differ, and our guide on telling tenants you are selling covers when the 42 and 90 day periods apply.
  7. Get advice if it is complicated. A property lawyer or Tenancy Services can confirm your position before you sign a sale agreement.

If you are weighing up a wider sale of your rental portfolio, our guide to selling an investment property covers the other side of the decision, and our article on why people sell a tenanted house looks at common reasons.

Common mistakes to avoid

  • Letting the effective period pass. The tenancy turns periodic, and your options narrow.
  • Assuming the sale ends the tenancy. It does not.
  • Entering without notice or permission. It can breach the tenant’s right to quiet enjoyment.
  • Verbal agreements. If an early exit is not in writing, it is hard to prove later.
  • Going to the Tribunal too quickly. It is meant for severe hardship, not convenience.

FAQ

Can a landlord end a fixed-term tenancy early in NZ?

Generally, no. A landlord cannot give notice to end a fixed-term tenancy early, except in limited circumstances set out by Tenancy Services. The usual route is a written agreement with the tenant. In cases of severe hardship, either party can apply to the Tenancy Tribunal.

What happens at the end of a fixed-term tenancy?

If nobody gives valid written notice during the effective period and no new agreement is made, the tenancy becomes periodic on the same terms. The effective period runs from 90 days to 21 days before expiry. Check your exact dates against your agreement.

Does selling a rental property end the fixed-term tenancy?

No. The tenancy continues with the new owner on the same terms. A landlord cannot end the fixed term early just because the property has sold. If the buyer wants the home vacant, you need the tenant’s agreement or a later settlement date.

Can my tenant refuse viewings if I am selling?

They cannot unreasonably refuse access, but they keep their right to quiet enjoyment and can set reasonable conditions, such as appointment-only viewings. Agreeing a schedule early usually works better than pushing for entry.

Is a fixed term or periodic tenancy better for a landlord who might sell?

A periodic tenancy usually gives more flexibility, because you can give notice to end it, for example 42 days if a buyer needs the home vacant. A fixed term gives more certainty on rent but limits your options. Weigh up how likely it is that you will sell in the next year.

Sources

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