APIA Blog

RSS Feed

How to deal with your tenants break up?

Friday, September 27, 2019


Sometimes, tenants who jointly sign a tenancy agreement may decide to part ways. When that happens, you would expect at least one of the two to move out of the renta. If one tenant chooses to stay on, how do you handle the tenancy?

You have two options:
  1. In the case of either a fixed term or periodic tenancy: It is on the exiting tenant to obtain a written agreement signed by everyone (i.e. you, the exiting tenant and the remaining tenant(s)) to have his/her name removed from the agreement from an agreed date. You will then complete and submit a change of tenant form. The form requires a declaration from the exiting tenant to make no claim on the bond money. The tidiest fix is to bow out of any private arrangement seeing that the total amount of bond held will not change. 
  2. In the case of a periodic tenancy: You also have the option to treat the termination from one tenant as a termination of the entire tenancy. From there the usual post-tenancy wrap-up (including bond claim/refund) and pre-tenancy checks follow. If you decide you are happy to rent to the remaining tenant then enter into a brand new tenancy agreement (and lodge a new bond). 
But life isn’t always as black and white as the law books would suggest. Which is why we’ve turned to APIA Vice President Peter Lewis for his practical take on best practice solution in this instance (note that Peter refers periodic tenancy in his answer):

The departure of any one of the joint tenants can legally end the tenancy. In my view, it should. Say you have two working tenants each contributing to the rent and one is now exiting. It is not unreasonable to wonder whether the remaining tenant (no matter how great he/she is) can afford the rent on his/her own. The only opportunity to make such an inquiry is to have the joint tenancy terminated before vetting the remaining tenant as if he/she is a ’new’ tenant applicant.

Say the tenancy is terminated. You would carry out a full property inspection on the date of terminating to ensure the any damage is identified and the liability for repair or cost recovery is settled. This will also set a baseline for any new tenancy. Any issues about access to and ownership of the bond deposit should also be settled at this time.
 
You are then left with a technical ‘vacancy’ to fill. You would carry out the standard pre-tenancy check on the remaining tenant. If any other persons age 18+ (such as relatives or friends) are moving into the property to assist, these people should be vetted in the usual way and named as joint tenants in the new tenancy agreement. If, after all of that, you are satisfied, have the new tenancy start from the date the last tenancy had ended.

 

Recent Posts


Tags

scotney williams property management Tribunal case study p lab RTAA 2019 cat interest rates property cycle heater subdivision gluckman report smoke alarm sale and purchas Q&A television market rent rent HHS bond clnz Jeff Bezos principal and interest productivity letting fee personal growth speculator HHGA holiday house ask an expert renovation off the plan Sponsored post TCIT rta reform watercare Investor story winz ird buyer's agent tenancy tribunal Standards New Zealand extractor fan property parry v inglis bad tenant ocr housing affordability cgt Investment tip Market report water bill partners robert kiyosaki debt enforcement HSWA rent increase government tenancy services minor dwelling lvr rent arrears wins inspection Editor's Choice Kris Pedersen Mortgages and Insurance property maintenance CCC property value rental wof equity wealth creation auckland council trespass management income damage DTI short-term rental warren buffett housing bubble negotiation rta Property (Relationships) Act structure cash-flow legal development trademe shower dome education letting skill shortage twg report anz buying worksafe ring-fencing mortgage sublease tenancy issues tax boarding house positive cash flow Must knows Holler banking relationship asbestos return building Must know Question and answer buying rules insurance ventilation finance sale and purchase investment strategy tenant unitary plan rental market bond form interest only airbnb insulation How to auckland CoreLogic financial advisers act business advice house prices meth contamination Landlording privacy warm up new zealand landlord market meth investor election 2017 trust Guest blog fixed-term tenancy initio first home buying nzpif capital gain heating LIM beginner investor maintenance data security reserve bank

Archive

Introducing Our Partners
Principal Sponsor - Kris Pedersen Mortgages & Insurance logo Gold Sponsor - Barfoot & Thompson logo Gold Sponsor - CoreLogic logo Property Apprentice logo The Insulation Warehouse logo The Renovation Team logo The New Zealand Property Investors' Federation logo
09 360 2376
info@apia.org.nz

The Tenancy Practice Service and TPS Credit Control work closely with the Auckland Property Investors' Association. Our vision of bringing helpful resources, documents and high quality services to Auckland Property Investors and Property Managers is shared by APIA, so its a partnership that works well. 

The Auckland Property Investors' Association is a great organisation for those who want access to advice and information from a range of industry experts and partners. 



Mathieu Holt- Managing Director, The Tenancy Practice Service & TPS Credit Control
Through the Association I found the channels and methods to fund the purchase of property I never dreamed about. Grant Brown

All round it has been one of those things Neil and I felt was really worthwhile belonging to. We have learned so much it has just built our confidence in what we are doing.

Janice Bieleski
I read two articles in the monthly magazine that saved me over $5,000. That is my membership fee for the next 26 years and I am sure I will learn a whole lot more! John Duncan
Fantastic organisation. The networking opportunities are brilliant and provide us with information and opportunities that cannot be obtained anywhere else. We learn something new at every meeting and we've been in this game for nearly 20 years. Pauline and Gyanen Kumar

I find the information obtained from various APIA meetings very useful in guiding my own property investment and rental management.  I also enjoy the networking opportunities with like-minded investors.  I am inspired by other investors’ success and find the more experiences and knowledge that I share with others, the more confident I become.  

Thanks to all APIA event organizers and administrators for your brilliant work. 

Stella Shao

I like talking to people and learning from their experience because it gives me the confidence to invest well. I think it is a knowledge thing. I now know I am doing things the right way.

Stephen Weatherall

My APIA membership has become a total success.

Every time I attend a monthly or regional meeting I come away with so many useful and positive tips that have added value to my property investments and management.

Not only that, the website is a great place for practical advice and useful information. It has now evolved into an important resource for my business.

Talk about value for money! The discounts I have been getting at Bunnings when I present my APIA membership card have more than paid for my annual subscription!

Tim Duffett, Plan A Investments Limited