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Nest Residential Rentals and Landlord Services Ltd v Folland [2020] NZDC 628

Published 08 December 2021

Appeal — Tenancy Tribunal — fixed term lease — abandonment of lease — liability — loss mitigation — Residential Tenancies Act 1986, ss 49 & 61. In this appeal from a decision of the Tenancy Tribunal the applicant sought arrears of rent following the respondent's cancellation of a fixed-term lease. The respondent had entered into a fixed-term lease to rent premises from the agent of the Landlord; the lease expired on 2 March 2018 and was extended to 28 February 2019. On 12 November 2018 the respondent's partner emailed the agent informing that the respondent would like to terminate the lease with effect from 30 November 2018. The agent replied with an application form to break the lease, which included a clause stating that they understood the permission of the owners would need to be obtained. Subsequently on or about 23 November 2018 the property management changed hands and the new property managers continued on with trying to obtain a new tenant. The respondent vacated the property in December of 2018, with two weeks rental unpaid. In the Tenancy Tribunal the Adjudicator determined that there had been no agreement to release the respondent from the lease and that she was in breach of the contract when she left the premises and stopped paying rent before the expiry of the lease, further finding that the landlord had failed to mitigate its losses by refusing a new tenancy offered from 8 December 2018. The Judge noted that under s 61 there is no obligation by a landlord to mitigate their loss, as required by s 49, where a tenant has abandoned the premises. It was clear that as the respondent had abandoned the premises on 7 December 2018 and that the premises were not re-let until 10 February 2019, the landlord was entitled to rent until the expiry of the fixed-term. The Tenancy Tribunal order was quashed and substituted by an order that the respondent was liable for rent of $11,586.70 for the period from 23 November 2018 to 9 February 2019. As it was not clear whether the sum claimed included payments already made by the respondent, leave was reserved for memoranda to be filed recording the correct amount to be paid. Judgment Date: 20 January 2020.

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