Q: We have a rental property currently tenanted, but our daughter is returning from London early next year and plans to move into it. The property is owned by our family trust, and I understand we can give 63 days’ notice under the RTA if a family member requires the home as their principal place of residence. However, I’m worried because, as I understand it, a family trust doesn’t technically have “family members”. Can we still terminate the tenancy on these grounds, or could the trust ownership make this more complicated?

A: There is a common misconception that a trust cannot give notice to terminate a periodic tenancy because a family member genuinely requires the premises as their principal place of residence. However, this is not the case.

There is a Tenancy Tribunal case where a tenant challenged the validity of a notice given by a family trust to end the tenancy because a family member of the trustees wanted to move in. While this case was decided under the previous rules before the Residential Tenancies Amendment Act 2020, it still provides useful guidance. The tribunal upheld the notice, citing that a trust is not separate from its trustees; therefore, trustees can give notice for their family or themselves to move into the property.

The key point is that the property is legally owned by the trustees, not the trust itself. If the trustees and beneficiaries are the same individuals, as often the case with family trusts, the trustees have the right to issue notice under the current law. However, the outcome might differ if the trust were a public trust or if the trustees were independent of the beneficiaries.

In summary, your family trust should be able to give notice to your tenant under these circumstances, provided there are no complicating factors like those mentioned.

Ryan Weir

propertybrokers.co.nz