Last updated: 23/02/2026

Often referred to as a ‘lease break’, one of the most stressful messages a landlord can receive is:

“Hi, we need to move out early…”

Your first thoughts are usually: Will I lose rent? Do I have to agree? What does the law say? How much admin will this involve?

Can a tenant break a fixed-term lease early?

In New Zealand, tenants cannot simply give notice to end a fixed-term tenancy early. The tenancy usually continues unless the landlord agrees, the tenancy is assigned to a replacement tenant, or the Tenancy Tribunal orders an early termination due to severe hardship.

The key rule that protects both landlords and tenants

Under the Residential Tenancies Act, a fixed-term tenancy is a legally binding contract for a set period and protects both parties throughout the tenancy.

Generally, neither the landlord nor the tenant can give notice to end a fixed-term tenancy early.

Instead, early termination can only happen in limited situations. This is important because it means a tenant cannot “give notice” and walk away, and they remain responsible for rent and obligations until an agreed end date. This means that when managed correctly, landlords can usually avoid financial loss during an early exit.

The three ways a fixed-term tenancy can end early

In practice, almost all early exits fall into one of these three scenarios.

1. Mutual agreement 

The simplest and most common outcome is when both landlord and tenant agree to end the tenancy early.

Tenancy Services confirms that fixed-term tenancies can be changed or ended early if both parties agree in writing.

In most cases this involves agreeing on a final move-out date, ensuring rent continues until that date, and arranging costs associated with re-letting.

The goal of this process is simple: the landlord should not be financially disadvantaged by a tenant leaving early.

2. Assignment (finding a replacement tenant)

Many tenants try to solve the problem by finding someone to take over their lease. This is called an assignment.

Under New Zealand law:

• Tenants must get the landlord’s written consent before assigning a tenancy

• Landlords must consider the request and must not decline a request unreasonably.

If approved:

• The new tenant takes over the lease 

• Rent, conditions, and end date remain the same

• The original tenant is released once paperwork is completed.

For landlords, this can often be the best outcome because:

• There is no vacancy period

• The tenancy continues uninterrupted.

3. Tenancy Tribunal (rare case)

In limited circumstances, either party can apply to the Tenancy Tribunal to end a fixed-term tenancy early.

This usually occurs only when there is severe hardship or an unforeseen change in circumstances.

The Tribunal will only grant early termination if the hardship of continuing the tenancy outweighs the hardship of ending it early.

Even then, compensation may be ordered to protect the landlord.

Why lease breaks can be stressful for landlords

While the legal framework protects landlords, managing the process can be complex and time consuming, especially when you have not long secured the current tenants. 

For many private landlords, the process often involves:

• Understanding legal obligations

• Negotiating agreements

• Advertising the property and managing viewings

• Screening replacement tenants

• Updating documentation and coordinating bond changes

• Ensuring no rent is lost.

Why handling this incorrectly can cost landlords money

While the law protects landlords, mistakes in the process can lead to:

• avoidable vacancy periods

• disputes over costs

• documentation errors

• delays securing replacement tenants

• unnecessary Tribunal involvement.

This is why having a clear, structured process is critical.

How we deal with lease breaks at South Property Management

For us as professional property managers, dealing with lease breaks is just part of the job. We understand that a tenant’s circumstances may change and as a result they may need to break their fixed-term lease. 

At South Property, we manage the entire process from negotiation and documentation, to re-tenancy, to ensure that you, the owner, remain financially protected throughout the process.

When notified, we clearly outline the process and the costs that are incurred by the tenant with breaking their lease (e.g. advertising and re-letting fees). All prospective tenants that apply go through our standard multi-bureau screening process, even if the current tenants have already found suitable replacements.

Once the new tenants are secured, we go through our standard end-of-tenancy process for the existing tenants and our new-tenancy process for the replacement tenants. 

Our process is designed to ensure:

• rent continues until a new tenancy starts

• replacement tenants are fully screened

• all agreements are documented correctly

• owners remain financially protected throughout
  
  

Frequently Asked Questions

Do landlords have to agree to an early exit?

No. A landlord is not required to release a tenant simply because they want to leave. However, most landlords choose to negotiate because:

• It often results in a faster re-tenancy

• It reduces disputes

• It protects rental income
  
  

What costs can landlords charge?

This is a common concern. Tenancy Services states that landlords can charge actual and reasonable costs associated with ending a fixed-term tenancy early. 

Typical costs include: 

• Advertising costs

• Administration time

• Tenant screening

• Viewing coordination

• Paperwork and documentation

Importantly, these must reflect real expenses and can’t be arbitrary penalties.

Who pays the rent until a new tenant moves in?

If a tenant leaves early they remain responsible for paying rent until an agreed termination date or replacement tenant is secured and takes over the rent.

In most agreements, tenants continue paying rent during the re-letting process to ensure landlords do not experience lost income.

Can the current tenant find a replacement tenant?

Yes they can, and this can be helpful in accelerating the time it takes to secure a new tenant. In this situation, the landlord must consider the request reasonably and can apply the normal screening standards.

Do you need help managing tenancy changes?

Situations like early lease breaks are where experienced property management makes a significant difference. At South Property, we manage the entire process from negotiation to re-tenancy, ensuring:

• compliance with NZ tenancy law

• clear documentation

• minimal vacancy time

• protection of your rental income

With the right process in place, lease breaks can be managed smoothly, professionally, and without unnecessary financial risk. If you’d like to discuss how we can support your investment property, we’re always happy to help.