help please re rent increase after fixed term

[lulu]

Hi all, I need some help here to get the process right. Apologies in advance for the stream of questions but while Im experienced with periodic tenancies I didnt until now have any fixed. I have inherited a very badly completed fixed term tenancy. Tenant is absolutely fine however rent is below market. Fixed term expiry just states 12 months although start date is completed.
Questions:
Can I assume the 12 months expiry would be enforceable as being a calendar 12 months from start date i.e same date following year? or is this challengable? dont think they will but wasnt their error.

Can I issue a 60 day rent increase notice to coincide with the supposed expiry date? or do I need to issue it starting from the expiry date? and can I then assume the tenancy reverts to periodoc?

I have no issue with the tenant wanting a further fixed term at the increased rate but would like to know what my options are.
Thanks in advance and hoping this makes sense.
Louise

[Re@der]

The tenancy finishes after 12 months so you need to know the intentions of tenant. If they want to stay then the ball is in your court as to the conditions of the ongoing tenancy.

[xris]

Lulu,

Sloppy TA's like this are common.

I believe your end date is not determined by the RTA but at the TT is likely to be 365 days later or close to that.

I believe there is no doubt a fixed tenancy exists and so you can end it at any time up to ?90 days after it ends.

You can also increase the rent immediately at this stage by terminating the tenancy and then signing them up again. Unfair perhaps but allowable under the RTA. This unforeseen result of the RTA is I believe likely to be changed in the new changes.

I may be wrong on one or two points but I think this advice is basically sound.

(I confess to being under the influence of two glasses of wine.)

xris

[The_Dog]

Xris,

If you can't clearly identify which points you may or may not be wrong on, isn't it better to leave advice giving to those not impaired by fermented grapes?

Lulu, welcome to the forum. Please be aware you still need to apply common sense to the information / advice given here. Issues are often not black and white, and you may get a variety of responses!!

The Dog.

[Glen]

Hi Lulu,

When you say 'inherited' a fixed term agreement, what does this mean?

Did you purchase the property for yourself or are you managing it?

How far into the term is the agreement?

Have you spoken to the tenants at all yet regarding any of this?
Maybe you could 'go over' the agreement again with them to tidy up loose ends, and clarify the end date in writing.

[xris]

Good Morning lulu,

Now with a clearer head I have reread my post and think it is fine.

Do not issue a 60 day notice because you do not need to and if you do you will undermine your position.

It does not matter how you inherited this situation - you did.

Don't go talking and negotiating because you don't need to. Just offer them a new tenancy stating on day, say, 370 (or when the rent day neatly falls), at market rent.

Don't give them time to think about it either. If they will not sign at the time of offer then tell them the tenancy will not continue and you will advertise.

As I said, perhaps a little unfair but that's life and that's also the RTA.

xris

[lulu]

Thanks for the replies so far all

And the welcome also - I have lurked for a long time but seldom post. For those who might have met me I currently co-run the West Auckland Property Investors group.

Glen - I bought the unit with the agreement in place - already owned the rest of the block and wanted this last one. There are two months left. I certainly intend to discuss this with the tenant but wanted to be sure of my process/options first. I have been over the RTA in detail but cant find any specific mention of what can happen here.
Louise

[Keys]

Questions:
Can I assume the 12 months expiry would be enforceable as being a calendar 12 months from start date i.e same date following year? or is this challengable? dont think they will but wasnt their error.

That's the position I would take.

Can I issue a 60 day rent increase notice to coincide with the supposed expiry date?

That's what I would do. Take into consideration that they have the right to leave without notification to you.

and can I then assume the tenancy reverts to periodoc?

Yes, it does. Unfortunately, while the RTA states there is a limbo period following the expiory date of 90 days, this only applies one way as there has been a court ruling which states that if the tenant remains in residence they are on a periodic with all of its protections. xris is not quite up to speed here. I'm at work so can't source my reference at the moment.

Thanks in advance and hoping this makes sense.
Louise

Not a problem Louise, welcome to the forum.


Keys

[Keys]

Good Morning lulu,

Now with a clearer head I have reread my post and think it is fine.

Do not issue a 60 day notice because you do not need to and if you do you will undermine your position.

It does not matter how you inherited this situation - you did.

Don't go talking and negotiating because you don't need to. Just offer them a new tenancy stating on day, say, 370 (or when the rent day neatly falls), at market rent.

Don't give them time to think about it either. If they will not sign at the time of offer then tell them the tenancy will not continue and you will advertise.

As I said, perhaps a little unfair but that's life and that's also the RTA.

xris

I disagree xris.

I'll have to dig out that particular court ruling for you if I can.


Keys

[Orkibi]

why not call the DBH for a chat to hear what they suggest to do in that scenario ? and what are your options?.

H

[xris]

That's the position I would take.



That's what I would do. Take into consideration that they have the right to leave without notification to you.



Yes, it does. Unfortunately, while the RTA states there is a limbo period following the expiory date of 90 days, this only applies one way as there has been a court ruling which states that if the tenant remains in residence they are on a periodic with all of its protections. xris is not quite up to speed here. I'm at work so can't source my reference at the moment.



Not a problem Louise, welcome to the forum.


Keys

If there are two months to go then you have every right to sort things out now or with only two days to go - your call. Unless there are other reasons behind your thinking then probably best to do it now. I usually approach 'good' tenants roughly six weeks before the end of the fixed period if nothing has been said beforehand - I think that's long enough notice.

Now, about keys' comments. this idea that a fixed becomes a periodic automatically for the tenant but not for the LL is an interesting one. I do recall reading something somewhere along these lines a while ago but cannot recall the details. Perhaps this is what you are referring to keys? However, I would be interested in reading it again because I do not think it would be exactly as you say. I think it is likely to refer to one specific case with its own specific circumstances. Also, any TT decision is not binding anyway, so no precedent has been set.

xris

[lulu]

Thanks Orkibi, Xris, Keys
I will be asking Dept of Building and Housing - theyre speaking at the West Akld meeting tomorrow night. I have usually found it is also useful to get the opinion of experienced people also particularly where the RTA seems to be silent on possible action

I really appreciate all the comments
Cheers
Louise

[Marcus]

RTA Section 60. Tenant remaining in possession after termination of
tenancy—(1) Where a tenant remains in occupation of the
premises after the tenancy has terminated or has been terminated,
all the obligations of the tenant shall continue in force as if the
tenancy were still subsisting until such time as the tenant ceases
to occupy the premises.
(2) If the landlord permits the tenant to remain in the premises
for more than 90 days after the tenancy has terminated or has
been terminated, without obtaining a possession order, or for
more than 90 days after obtaining a possession order, the landlord
shall be deemed to have granted, and the tenant shall be deemed
to have accepted, as from the date on which that period of 90
days expired, a periodic tenancy of the premises on the same
terms and conditions as pertained to the original tenancy
immediately before its termination.

[xris]

So, Marcus, what do you, or anyone else for that matter, take this to mean?

xris

[Glen]

Good Morning lulu,


It does not matter how you inherited this situation - you did.


xris

I disagree.

It does matter, because if you can see the process of how you came to be in any situation, then you can learn from that process and think about things differently next time, to avoid the same problem.

Take a step back and see how maybe things could have been handled at the beginning. i.e. when you were signing the S&P, and had a chance to put the onus of any anticipated problems then, back onto the vendor.