New Zealand’s Fixed-Term Tenancy Reform: What Landlords Need to Know in 2025

Significant changes to New Zealand’s tenancy laws are set to take effect from 1 May 2025, offering landlords greater flexibility in managing fixed-term tenancies. These reforms, introduced under the Residential Tenancies Amendment Act 2024, mark a departure from previous regulations and aim to balance the interests of both landlords and tenants.

Key Changes to Fixed-Term Tenancies

Under the new legislation, fixed-term tenancies expiring on or after 1 May 2025 will no longer automatically convert to periodic tenancies unless specific actions are taken. Landlords and tenants now have the following options:

• Transition to a Periodic Tenancy: Allow the tenancy to roll over without any action.
• Renew or Extend the Tenancy: Both parties can agree to a new fixed term.
• Terminate at Expiry: Either party can choose to end the tenancy by providing written notice within the designated timeframe.

This shift empowers landlords to make decisions aligned with their property management strategies without the need to provide specific legal reasons for termination.

Understanding the “Effective Period”

To validly terminate a fixed-term tenancy at its conclusion, written notice must be served within a specific window known as the "effective period." This period spans from 90 days to 21 days before the tenancy's end date.Example:

• Tenancy End Date: 1 August 2025
• Effective Notice Period: 3 May to 11 July 2025

Failure to provide notice within this timeframe will result in the tenancy automatically converting to a periodic tenancy.

No Justification Required for Termination

A notable aspect of the reform is that landlords are no longer obligated to furnish a specific reason when ending a fixed-term tenancy at its expiry, provided the notice is given within the effective period. This change reinstates a level of discretion for landlords in managing their rental properties.

Best Practices for Landlords

While the legislation permits notice as late as 21 days before tenancy expiry, it is advisable for landlords to provide notice closer to the 90-day mark. Early communication affords tenants ample time to secure alternative accommodation, fostering goodwill and reducing potential disputes.Notice Requirements:

• Written Format: Notice must be documented in writing.
• Clarity: Clearly state the intention to end the tenancy on the specified expiry date.
• Delivery Method: Serve the notice using a method agreed upon in the tenancy agreement (e.g., email or post).

Attention to these details ensures the notice is legally enforceable and mitigates the risk of unintended tenancy continuations.

Implications of Missing the Notice Window

If a landlord fails to provide notice within the effective period, the tenancy transitions into a periodic arrangement by default. Terminating a periodic tenancy then requires adherence to standard notice periods, such as 42 days if the property is to be sold or 90 days for other reasons.

Harcourts Patras & Co (Greenlane): Your Partner in Property Management

At Harcourts Patras & Co (Greenlane), we understand the complexities of tenancy laws and the importance of timely communication. Our property managers proactively monitor tenancy timelines, engage with tenants early, and ensure all notices are issued correctly and punctually.For landlords seeking to navigate these changes seamlessly, partnering with Harcourts Patras & Co (Greenlane) provides peace of mind and professional support. If you know someone managing their own rental property, now is an opportune time to inform them of these legislative changes. Should they prefer to entrust the intricacies of property management to experienced professionals, we are here to assist. Your referrals are invaluable, and we remain committed to supporting landlords in maintaining compliance, protecting their investments, and achieving optimal outcomes.