Breach notices

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If a commercial or retail tenant breaches their lease obligations, the lessor may issue a Notice to Remedy Breach under the Property Law Act 2023 approved Form 7.

Notice to Remedy Breach

The Property Law Act 2023 (the PLA) sets out the procedures for issuing a Notice to Remedy Breach (a Form 7 Notice).

The lessor must comply  with the lease when issuing notices and Section 153 of the PLA sets out what a Form 7 Notice must include.

  • Failure to strictly comply with the requirements of the PLA and lease when issuing a Form 7 Notice can result in the notice being deemed invalid by a court.
  • If a notice is deemed invalid, the notice would be ineffective and would need to be reissued by the landlord.
  • If an invalid notice was relied upon by the lessor for a ‘lock out’, a tenant may have a right to compensation.
  • The lessor must provide a copy of the Form 7 Notice to ‘designated persons’ (sublessee, guarantor, martgagee or assignee) whose names and addresses are known to them (section 154).

Important facts

  • If a tenant abandons the premises, the lessor may not be required to give the tenant a Form 7 Notice or go to court to take back the property, but they must notify each ‘designated person’ (section 156).
  • A tenant or ‘designated person’ may have limited time to apply to the courts for relief (section 160).
  • The QSBC may be able to offer mediation; however, it may not be suitable, or required, in urgent situations – seek legal advice.

Reasonable time

Lessors must give tenants reasonable time after service of the Form 7 Notice to remedy the breach.

  • Lessors must consider the nature and extent of the breach, in determining the reasonable time for a breach to be remedied (section 153(2)).
  • A Form 7 Notice may not be required and different timeframes may apply to terminate tenancies at will or periodic tenancies (section 174 and 175).

Unable to remedy in time

If you cannot meet the deadline to remedy a breach:

  • Seek legal advice immediately on whether the Form 7 Notice complies with the PLA and seek legal advice on how to proceed.
  • Consider the potential impacts and the options available to rectify the breach.
  • Try to negotiate an extension with your lessor, get any extension in writing.
  • Propose interim measures to mitigate the impact of the breach while you work to achieve a complete resolution.

Locked out without notice

If you find yourself locked out without the proper notice, consider the following steps:

  • Seek legal advice immediately.
  • Assess the viability of pursuing legal proceedings for relief or compensation.
  • Assess whether the lessor’s actions are consistent with the lease.

Impact of inaction

If a breach is not disputed or rectified in full by the date specified in the breach notice the financial and legal implications can be serious and significant including terminating the lease, having the locks changed, any possessions inside seized or sold, forfeiture of any bond or bank guarantee, and reputational damage with staff and customers.

Response options

If you receive a Form 7 Notice, you should urgently seek legal advice from a qualified attorney experienced in property and tenancy law. There are generally four options:

  1. Rectify the breach (within the timeframe specified in the notice). 
  2. Dispute the breach if they believe that it is incorrectly served, invalid, unfounded, or unjustified (within strict timeframes).
  3. Attempt to negotiate a resolution. Providing a specific plan to the lessor may increase the likelihood of acceptance; however, the lessor may have no obligation to negotiate and might proceed with legal action.
  4. Tenants could ignore the notice, only partially rectify the breach, or do nothing and hope the issue goes away. This option is not advised.

Keep detailed records in case legal action becomes necessary.

Struggling to pay rent

Rent arrears are a common trigger for re-entry or forfeiture. If you a struggling:

Top tips

  • Seek urgent legal advice from a qualified attorney experienced in commercial property law.
  • The QSBC may be able to offer mediation; however, mediation may not be suitable, or required, in urgent situations.

More information

Contact the QSBC by submitting an online enquiry or calling 1300 312 344.

Download the Breach notices fact sheet. 

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