If a commercial tenant breaches their lease obligations, the landlord may issue a Form 7 Notice to Remedy Breach of Covenant under the Property Law Act 1974.
Notice to Remedy Breach
The Property Law Act 1974 (the PLA) sets out the procedures for issuing a Form 7 Notice to Remedy Breach of Covenant (a Form 7 Notice).
The landlord must comply with the lease when issuing notices and Section 124 of the PLA sets out what a Form 7 Notice must include.
Landlords must give tenants reasonable time after service of the Form 7 Notice to remedy the breach.
Unable to remedy in time
If you cannot meet the deadline to remedy a breach:
Locked out without notice
If you find yourself locked out without the proper notice, consider the following steps:
Impact of inaction
When a tenant receives a Form 7 Notice, there are generally four options:
- Rectify the breach (within the timeframe specified in the notice).
- Dispute the breach if they believe that it is incorrectly served, invalid, unfounded, or unjustified.
- Attempt to negotiate a resolution. Providing a specific plan to the landlord may increase the likelihood of acceptance; however, the landlord may have no obligation to negotiate and might proceed with legal action.
- Tenants could ignore the notice, only partially rectify the breach, or do nothing and hope the issue goes away. This option is not advised.
- Talk to the landlord about how you can work together to find a resolution.
- 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:
- Seek support from the Small Business Debt Helpline (1800 413 828)
- Access information on cash flow management
- Contact your bank’s financial hardship team
- Book free mentoring to review prices or pivot your business
- Access free mental health and wellbeing resources for businesses
- Seek urgent legal advice from a qualified attorney experienced in property and tenancy law.
- The QSBC may be able to offer mediation; however, it may not be suitable, or required, in urgent situations.
Download the Breach notices fact sheet.