Short fixed-term tenancy
A short fixed-term tenancy is a fixed-term rental agreement of 90 days or less.
The landlord and tenant must agree in writing before the tenancy commences that the tenancy will end on the expiry date. This means no further notice to end the tenancy needs to be given and the tenancy ends on that expiry date. A short fixed-term tenancy cannot be used as a trial period.
Short Fixed-Term Residential Tenancy Agreement
The Residential Tenancies Act 1986 (RTA) applies to short-term fixed tenancies, but the following do not apply:
- rules about market rent (the rent is fixed)
- rules about increasing the rent after making improvements to the property
- rules on giving notice to end the tenancy
If the landlord and tenant decide to extend the tenancy past the 90-day period, it automatically becomes a periodic tenancy at the end of the fixed-term. If this happens, all RTA rules will apply as usual.
A short fixed-term tenancy can be shorter than 90 days. If renewing or extending a short fixed-term tenancy results in the total length of the tenancy being greater than 90 days, it automatically becomes a periodic tenancy. For example, if a landlord and tenant agree to a short fixed-term tenancy of 60 days and then extend it for 40 days, the tenancy will be longer than 90 days and will become periodic after 100 days. If the tenant wants to end the tenancy after it has become periodic, they must give at least 28 days written notice. If the landlord wants to end the tenancy after it has become periodic, they must give written notice and use one of the specific tenancy termination grounds. Notice of termination can be given by either party after 90 days of the tenancy.
More information on ending a periodic tenancy
Landlords and tenants are responsible for meeting their obligations under tenancy law during a short fixed-term tenancy. For landlords, this includes ensuring the property is maintained to a reasonable standard, has working smoke alarms, and meets health and safety requirements. Landlords must also provide the tenant with certain information and statements, including an insurance statement, insulation statement and healthy homes standards 'intent to comply' statement. A healthy homes compliance statement is recommended, but not mandatory, for a short fixed-term tenancy.
Healthy homes standards
The healthy homes standards apply to short fixed-term tenancies of 90 days or less. However, the compliance deadline for new tenancies is 1 July 2025, or within 120 days after a tenancy commences, whichever is earlier. This means that in practice if the healthy homes standards are not complied with during a short fixed-term tenancy of 90 days or less, the landlord will not be penalised if that tenancy ends before 1 July 2025.
If the short fixed-term tenancy expires before the compliance deadline then the requirement for a landlord to provide a healthy homes compliance statement is not activated. This should be noted in the tenancy agreement. Landlords must also include in the tenancy agreement a healthy homes 'intent to comply' statement confirming the landlord's intent to comply with the healthy homes standards.
If the short fixed-term tenancy lasts longer than 90 days, for example if it is renewed or extended, it will then no longer be a short fixed-term tenancy and the landlord will have a further 30 days to comply with the healthy homes standards by the compliance deadline. This is because the 120 day compliance deadline does not reset.
If a short fixed-term tenancy is renewed the landlord must provide the tenant(s) with a completed healthy homes compliance statement if the tenancy will no longer end before the compliance deadline.
From 1 July 2025 all rental properties must comply with the healthy homes standards. This means all new short fixed-term tenancies must comply with the healthy homes standards at the time the tenancy commences and landlords must provide a completed healthy homes compliance statement.
Renting out a holiday home
If you are the owner of a holiday home, you may want to rent out the property for part of the year and still have it available for your own holiday. A short fixed-term tenancy could be beneficial in this situation, as you could rent out the property for 90 days (or less) and the tenancy will end on the expiry date.
Example
A landlord owns a holiday home in Queenstown and holidays there in summer from January to March) and again in winter from July to August. They rent the property out during spring and autumn with 2 short term fixed-tenancies, 1 in April to June (90 days) and 1 in September to November (90 days). The landlord is up front and very clear with the tenants at the start of the tenancy so they understand the short fixed-term will end on the expiry date and they must vacate. The landlord does not allow extensions of the short fixed-term tenancies, as they are aware that extending over 90 days means the tenancy becomes periodic at the end of the fixed-term. They remind the tenants of their obligation to vacate at the end of the 90-day period. This allows them to rent out the house for part of the year and use the house themselves during the summer and winter months.
There are other options that would allow you to rent out your holiday home and have it available for your own holiday. For example, you could lease the property under the Property Law Act 2007 to an employer who is wanting to use the property as rental accommodation for their employees. This initial arrangement between the landlord and the sub-landlord (the employer) is not covered by the RTA. The agreement could have a fixed end date, allowing you to regain the premises at the desired time. This also allows the employer to give lawful notice to the employee to end their tenancy arrangement that would be covered by the RTA, as their interest in the premises will be ending.
Example
A landlord owns a property in Wanaka. They stay there during the winter, but it is vacant for the rest of the year. They decide to lease the property to a local business that has employees working in the area over the spring and summer months. This lease under the Property Law Act 2007 is for a fixed term from 1 September – to 1 April. The arrangement does not allow for the employer, (the sub-landlord,) to occupy the premises themselves but allows the employer to have their employees occupy the property. The employer gives their employee(s) 90 days written notice to terminate their service tenancy on 1 April, using the termination ground under the RTA that the landlord is not the owner of the premises and the landlord’s interest in the premises is due to end, and the lease, (under the Property Law Act 2007,) also finishes on this date. This means the landlord has the property available for their winter ski trips while benefiting from stable income for the remainder of the year.
Get advice before you enter into these arrangements
Before entering any of these arrangements, we recommend seeking legal advice to ensure it is appropriate for your circumstances. We also recommend speaking with your insurance company and local council to determine if the arrangement would affect your policy and/or rates. If you are interested in any of these options, you could either arrange it yourself or approach a property management firm in the area to see if it is something they can arrange and manage for you.
Last updated: 28 June 2023
