What was Tenancy Tribunal case 4716773 about?

The tribunal order states: By way of declaration: it is not unlawful to market a property for sale prior to the

How much money was awarded in case 4716773?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4716773?

The dispute type was not classified.

Where can I read the official tribunal order for case 4716773?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9707421-Tribunal_Order.pdf.

What was Tenancy Tribunal case 4716773 about?

The tribunal order states: By way of declaration: it is not unlawful to market a property for sale prior to the

How much money was awarded in case 4716773?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4716773?

The dispute type was not classified.

Where can I read the official tribunal order for case 4716773?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9707421-Tribunal_Order.pdf.

25 Paparoa Crescent, Aotea, Porirua 5024 Tenancy Tribunal Case 4716773 — Tenancy dispute

Order

By way of declaration: it is not unlawful to market a property for sale prior to the end of a fixed term tenancy when notice has been given to end the tenancy pursuant to 51(2)(a) Residential Tenancies Act 1986 provided in doing so a tenant’s rights noted elsewhere in the Act are not impinged.

Reasons

This is the second order in these proceedings, the first being issued on 1 December. This decision relates to the landlord’s actions in marketing the property prior to the end of the fixed term when notice had been given pursuant to section 51(2)(a) of the Residential Tenancies Act 1986 (RTA). Both parties have different perspectives as to the legality of such marketing and seek direction from the Tribunal on the point.
The situation is that the parties had a fixed term tenancy that is due to end on 26 January 2024. On 6 September the landlords gave notice pursuant to section 51(2)(a) of the RTA that the tenancy would end on 26 January as the home was to be marketed for sale. This was a lawful and valid notice.
They also wished to place the home on the market prior to the tenancy ending in an effort to minimise loss from the property. To be specific, they wished to sell the home with a settlement date as close to the expiry of the fixed term as possible.
Mr and Ms Botes did not initially allow them access to market the property as they had understood that the property was supposed to be sold after they had moved out. They took this position as they had been advised by Tenancy Services that it was not best practice to place a home on the market during a fixed term.
They refer to the Tenancy Services website which states: If the tenants are on a fixed-term tenancy that was started on or after 11 February 2021, the landlord can end the tenancy on or after expiry with 90 days’ written notice to put the property on the market. The landlord may make preparation for the sale (such as a real estate agent carrying out an appraisal or taking photos) if the tenant gives permission. Once the tenancy has ended, the landlord must put the property on the market within 90 days. There have been recent Tenancy Tribunal decisions indicating that it may be acceptable to market the property before the tenancy has ended when using section 51(2)(a) of the Residential Tenancies Act 1986. A landlord could consider seeking their own independent legal advice based on their circumstances before giving notice under this new termination reason.
They also submit that section 51(2)(a) refers to marketing after a tenancy has ended. In particular it says: the premises are to be put on the market by the owner within 90 days after the termination date for the purposes of sale or other disposition;
Accordingly, they submit that if notice is given pursuant to this section, the marketing can only be commenced within 90 days of the termination date in line with the wording of the section.
The Botes further rely on a Tribunal decision 1 which states 2 : In some ways two worlds collide when a tenanted property is marketed for sale. The landlord continues to receive rent and retains obligations and responsibilities under the Residential Tenancies Act 1986 (“RTA”). The landlord is also a vendor seeking to maximise the return on any successful sale, relying on the advice and efforts of a professional real estate agent. Managing both worlds can be a sensitive juggling act for a landlord. Section 51(2)(a) of the RTA anticipates this and makes provision for landlord to terminate by notice when “the premises are 1 [2022] NZTT Nelson 4323418 2 At paragraph 11 to be put on the market by the owner within 90 days after the termination date for the purposes of sale or other disposition” if they so choose.
The landlord does not agree with this reading of the RTA. Ms Billing for the landlord made comprehensive submissions supporting a situation when a landlord may need to market their property with the tenants in situ prior to the end of the term. She says that, as here, it would be nonsensical and economically unfeasible for s51(2)(a) to require owners to market their properties with vacant possession.
She references two Tribunal decisions in support of her submission. As follows: a. [2022] NZTT 4335290, 4332951:
The landlord had an obligation to advise the tenant that the premises were going on the market and gave the appropriate notice to that effect. 29. In addition, the landlord decided to give the tenant notice to vacate, which they were entitled to do under section 51(2)(a). The only requirement in that section is that the premises are put on the market within 90 days after the termination.
There is nothing in the subsection to prevent the premises being marketed before the termination date. b. [2021] NZTT Christchurch 4316148, 4316302:
In any event, I do not consider that section 51(2)(a) of the Act can sensibly be read to mean that the landlord cannot market the property for sale until after the 90-day notice expires. I cannot see any logical reason why Parliament would have intended such a restriction. In particular, a landlord is not prohibited from putting a property on the market for sale during a tenancy where no 90-day notice is given. Such a restriction also does not sit well with other sections of the Act such as section 48(2) which entitles a landlord to show prospective purchasers the premises during the tenancy and the requirement in section 47(1) which requires a landlord to give the tenant notice of the premises being put on the market for sale.
In my view my view the word “within” in the section is intended to mean “not further off than” or “not after the end of” the period of 90 days after the expiry of the notice. Thus, if the landlord gives a notice to end the tenancy because he or she intends to sell it, the landlord can put the property on the market for sale at any time provided it is no later than 90 days after the expiry of the 90-day notice. Discussion
Following amendments to the RTA that came into force in 2021, landlords are currently no longer able to terminate tenancies for no reason. Section 51 dictates the specific occasions upon which tenancies can be terminated and the notice provisions accorded to each.
The Residential Tenancies Bill 2020 Commentary states that removal of these “no cause” terminations was designed to ensure that “tenants would know why their tenancy was ending and that a justified reason existed”. Essentially, they were to curb the practice of unscrupulous landlords ending tenancies because they did not like the tenants.
Prior to the amendments there were no restrictions on landlords marketing their property with tenants in situ provided they did not breach sections 38 or 48 of the RTA in doing so. It does not seem logical, or substantiated, that Parliament meant with these amendments to make it harder for landlords to sell their properties, or to place them under tighter financial constraints.
The wording of section 51(2)(a) is somewhat confusing which is no doubt why Tenancy Services gave the advice they did to the Botes. I do understand however that they were not categorical as to what a landlord should do, but were saying that ideally the property should be marketed after termination.
I consider that the information provided on the Tenancy Services website and the case provided by the Botes do not give clear direction either way, but do note the ambiguity and the conflicting needs such a situation presents.
I prefer the reasoning of the learned adjudicators in the above referenced cases quoted for the landlord. The specific wording of the section does not prohibit earlier marketing, it just gives an end date upon which the property must be marketed before if such a termination notice is given.
Section 51(2)(a) refers to a reason for a termination notice, not a process. The time restriction for placing the property on the market is to ensure a landlord who issued such a notice had a valid reason for doing so. A landlord, such as Mr and Ms Lister, who genuinely needs to sell and is marketing their property, is not the type of landlord this section is directed to.
Accordingly, I do not consider that the RTA restricts a landlord from marketing their property for sale before the end of a tenancy if they have provided notice to end the tenancy pursuant to s51(2)(a) of the RTA.

Reasons

This is the second order in these proceedings, the first being issued on 1 December. This decision relates to the landlord’s actions in marketing the property prior to the end of the fixed term when notice had been given pursuant to section 51(2)(a) of the Residential Tenancies Act 1986 (RTA). Both parties have different perspectives as to the legality of such marketing and seek direction from the Tribunal on the point.

The situation is that the parties had a fixed term tenancy that is due to end on 26 January 2024. On 6 September the landlords gave notice pursuant to section 51(2)(a) of the RTA that the tenancy would end on 26 January as the home was to be marketed for sale. This was a lawful and valid notice.

They also wished to place the home on the market prior to the tenancy ending in an effort to minimise loss from the property. To be specific, they wished to sell the home with a settlement date as close to the expiry of the fixed term as possible.

Mr and Ms Botes did not initially allow them access to market the property as they had understood that the property was supposed to be sold after they had moved out. They took this position as they had been advised by Tenancy Services that it was not best practice to place a home on the market during a fixed term.

They refer to the Tenancy Services website which states: If the tenants are on a fixed-term tenancy that was started on or after 11 February 2021, the landlord can end the tenancy on or after expiry with 90 days’ written notice to put the property on the market. The landlord may make preparation for the sale (such as a real estate agent carrying out an appraisal or taking photos) if the tenant gives permission. Once the tenancy has ended, the landlord must put the property on the market within 90 days. There have been recent Tenancy Tribunal decisions indicating that it may be acceptable to market the property before the tenancy has ended when using section 51(2)(a) of the Residential Tenancies Act 1986. A landlord could consider seeking their own independent legal advice based on their circumstances before giving notice under this new termination reason.

They also submit that section 51(2)(a) refers to marketing after a tenancy has ended. In particular it says: the premises are to be put on the market by the owner within 90 days after the termination date for the purposes of sale or other disposition;

Accordingly, they submit that if notice is given pursuant to this section, the marketing can only be commenced within 90 days of the termination date in line with the wording of the section.

The Botes further rely on a Tribunal decision 1 which states 2 : In some ways two worlds collide when a tenanted property is marketed for sale. The landlord continues to receive rent and retains obligations and responsibilities under the Residential Tenancies Act 1986 (“RTA”). The landlord is also a vendor seeking to maximise the return on any successful sale, relying on the advice and efforts of a professional real estate agent. Managing both worlds can be a sensitive juggling act for a landlord. Section 51(2)(a) of the RTA anticipates this and makes provision for landlord to terminate by notice when “the premises are 1 [2022] NZTT Nelson 4323418 2 At paragraph 11 to be put on the market by the owner within 90 days after the termination date for the purposes of sale or other disposition” if they so choose.

The landlord does not agree with this reading of the RTA. Ms Billing for the landlord made comprehensive submissions supporting a situation when a landlord may need to market their property with the tenants in situ prior to the end of the term. She says that, as here, it would be nonsensical and economically unfeasible for s51(2)(a) to require owners to market their properties with vacant possession.

She references two Tribunal decisions in support of her submission. As follows: a. [2022] NZTT 4335290, 4332951:

The landlord had an obligation to advise the tenant that the premises were going on the market and gave the appropriate notice to that effect. 29. In addition, the landlord decided to give the tenant notice to vacate, which they were entitled to do under section 51(2)(a). The only requirement in that section is that the premises are put on the market within 90 days after the termination.

There is nothing in the subsection to prevent the premises being marketed before the termination date. b. [2021] NZTT Christchurch 4316148, 4316302:

In any event, I do not consider that section 51(2)(a) of the Act can sensibly be read to mean that the landlord cannot market the property for sale until after the 90-day notice expires. I cannot see any logical reason why Parliament would have intended such a restriction. In particular, a landlord is not prohibited from putting a property on the market for sale during a tenancy where no 90-day notice is given. Such a restriction also does not sit well with other sections of the Act such as section 48(2) which entitles a landlord to show prospective purchasers the premises during the tenancy and the requirement in section 47(1) which requires a landlord to give the tenant notice of the premises being put on the market for sale.

In my view my view the word “within” in the section is intended to mean “not further off than” or “not after the end of” the period of 90 days after the expiry of the notice. Thus, if the landlord gives a notice to end the tenancy because he or she intends to sell it, the landlord can put the property on the market for sale at any time provided it is no later than 90 days after the expiry of the 90-day notice. Discussion

Following amendments to the RTA that came into force in 2021, landlords are currently no longer able to terminate tenancies for no reason. Section 51 dictates the specific occasions upon which tenancies can be terminated and the notice provisions accorded to each.

The Residential Tenancies Bill 2020 Commentary states that removal of these “no cause” terminations was designed to ensure that “tenants would know why their tenancy was ending and that a justified reason existed”. Essentially, they were to curb the practice of unscrupulous landlords ending tenancies because they did not like the tenants.

Prior to the amendments there were no restrictions on landlords marketing their property with tenants in situ provided they did not breach sections 38 or 48 of the RTA in doing so. It does not seem logical, or substantiated, that Parliament meant with these amendments to make it harder for landlords to sell their properties, or to place them under tighter financial constraints.

The wording of section 51(2)(a) is somewhat confusing which is no doubt why Tenancy Services gave the advice they did to the Botes. I do understand however that they were not categorical as to what a landlord should do, but were saying that ideally the property should be marketed after termination.

I consider that the information provided on the Tenancy Services website and the case provided by the Botes do not give clear direction either way, but do note the ambiguity and the conflicting needs such a situation presents.

I prefer the reasoning of the learned adjudicators in the above referenced cases quoted for the landlord. The specific wording of the section does not prohibit earlier marketing, it just gives an end date upon which the property must be marketed before if such a termination notice is given.

Section 51(2)(a) refers to a reason for a termination notice, not a process. The time restriction for placing the property on the market is to ensure a landlord who issued such a notice had a valid reason for doing so. A landlord, such as Mr and Ms Lister, who genuinely needs to sell and is marketing their property, is not the type of landlord this section is directed to.

Accordingly, I do not consider that the RTA restricts a landlord from marketing their property for sale before the end of a tenancy if they have provided notice to end the tenancy pursuant to s51(2)(a) of the RTA.

Tenancy Tribunal case 4716773 — Tenancy dispute at 25 Paparoa Crescent, Aotea, Porirua 5024

At a glance

Claims & awards

Tenancy Tribunal case 4716773 — Tenancy dispute at 25 Paparoa Crescent, Aotea, Porirua 5024

At a glance

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Property management

Frequently asked questions

Order

Reasons

Topics & place

Residential Tenancies Act sections

Property management

Frequently asked questions