If a tenant wants to end a fixed-term tenancy early, the easiest solution is for the tenant to ask the landlord to agree to them leaving. If this isn’t possible, the tenant can ask the landlord to agree to them finding a replacement tenant.
There are two options to replace a tenant: assigning or subletting the tenancy.
Assigning the tenancy, where the tenancy is transferred to another person, is a better option for tenants. Subletting, where the tenant on-rents the property to another person, has significant risks for the original tenant because they remain responsible for the tenancy.
Both assignment and subletting require a variation to the tenancy agreement. The variation must be signed by both the landlord and tenant and state what date it will take effect. The landlord can include conditions for the variation, and can charge the tenant reasonable costs, such as administration or tenant vetting fees, related to processing the requested change.
Find out about other options for ending a fixed-term tenancy
To end a periodic tenancy, the best option is for the tenant to simply give the required 21 days’ notice rather than assigning or subletting the tenancy. Be aware that if there are multiple tenants named on the tenancy agreement, and any one of them gives notice, this ends the periodic tenancy for all the tenants.
Assignment of tenancy
Assignment is when a tenant ends their tenancy by transferring their tenancy to another tenant. A tenancy agreement cannot prohibit assignment, unless it is a social housing tenancy or the tenancy was started before 11 February 2021 (s 43A RTA).
Need agreement from the landlord and other tenants
If the tenant wants to assign the tenancy to a new tenant, they will need to get written agreement from their landlord to remove their name from the tenancy agreement and replace it with the new tenant’s name from a particular date. It is unlawful for a tenant to assign the tenancy without the landlord’s consent.
The tenant will also need to get agreement for the assignment from any other tenants still living in the property.
When a tenant assigns their tenancy agreement to a new tenant, the new tenant takes over the tenancy with the same conditions as previously, including the same rent and same end date for the tenancy. This applies even if all the tenants leave and assign the tenancy to a new group of tenants.
The landlord cannot unreasonably withhold their consent for assignment, but they can attach reasonable conditions (s 43B RTA).
Tenancy Services provide this template letter that tenants can use to request an assignment of their tenancy.
On the date the new tenant takes over, the original tenant is no longer responsible for the tenancy. They will still need to pay any money they owe to the landlord from before that date.
Quick tip
What to do if the landlord withholds consent for assignment
The landlord cannot unreasonably withhold consent to assign a tenancy to a new tenant (s 43B RTA). There are only a limited range of issues that the landlord should consider when deciding whether to withhold consent. These could include:
- whether there is a reasonable basis for the tenant’s request
- the impact on the landlord (eg, lost revenue, time, etc)
- whether there are any problems with the new tenant (eg, poor credit or bad references).
The tenant can mitigate the likelihood of a landlord withholding consent by addressing these issues when making the request to assign the tenancy. This might include providing references for the new tenant and offering to pay reasonable expenses.
If the landlord withholds consent, or takes too long to respond to the request of the tenant, this is an unlawful act and the tenant can apply to the Tenancy Tribunal to have the issue resolved.
Quick tip
In the case of a fixed-term tenancy where the landlord withholds consent for assignment and the tenant considers this is unreasonable, the tenant might want to suggest ending the fixed-term tenancy early by agreement as an alternative, before taking the matter to the Tenancy Tribunal.
Subletting of tenancy
Subletting is usually where a tenant moves out of the house they are renting and then rents the house to someone else (‘on-rents’). It has significant risks for the original tenant because they remain responsible for the tenancy.
The tenancy agreement must allow for subletting
Whether a tenant is allowed to sublet the property depends on what their tenancy agreement says. Tenancy agreements are allowed to prohibit the tenant from subletting the premises (s 44(1) RTA).
If subletting is not prohibited, the tenant can sublet the property but they must get the prior written permission of the landlord (s 44(2) RTA). The tenant must obey any conditions that the landlord sets.
The landlord cannot withhold consent unreasonably, or attach any unreasonable conditions to their consent, if the tenancy agreement allows subletting (s 44(3) RTA). If they do, the tenant can take a claim to the Tenancy Tribunal.
It is an unlawful act if the tenant sublets all or part of the rented property without written permission from the landlord or if the tenancy agreement prohibits it (s 44(2A) RTA)
What subletting means for the tenant
When a tenant sublets a property they remain responsible to the landlord until the end of their fixed term. They must ensure that the rent is paid on time and the place is kept clean and tidy and not damaged. If the subletting tenant/s don’t pay their rent or cause damage, it is the original tenant who will be pursued for payment.
The original tenant also becomes the sublandlord of the person/people who move into the house (the subtenant/s) and has landlord responsibilities towards them. This includes needing to sign a separate tenancy agreement with the subtenant/s (unless the sublet is for holiday accommodation).
Thus, when subletting, the original tenant takes on:
- all the legal rights and responsibilities of a tenant as set out by their tenancy agreement with their landlord, and
- all the legal rights and responsibilities of a landlord as set out by the new tenancy agreement with the subtenant/s.
The responsibility of the original tenant towards both the landlord and the subtenant/s ends at the end date of the original fixed term.
What happens at the end of a fixed-term subtenancy
The landlord can end both the original tenancy and subtenancy at the end of the fixed term by giving all involved the appropriate notice.
Alternatively, the landlord and subtenant/s can choose not to end the subtenancy, and the subtenancy will continue directly with the landlord. The landlord takes over the original tenant’s sublandlord responsibilities (s 57 RTA).
Subletting property for holiday accommodation or other uses
If tenants rent out any part of their rental property, this may be considered subletting. The exception to this is when a tenant shares the rental property with a flatmate. A potential example of subletting would be when a tenant rents out all or part of the property for temporary holiday accommodation.
Tenants must speak to their landlord before renting out any part of the rental property for anything other than a place to live. Renting out all or part of the property for business purposes or for temporary holiday accommodation may be seen as subletting. As well as being a potential breach of the tenancy agreement, such subletting may also cause insurance problems for both landlords and tenants.
Did you find this information helpful?
