Not paying rent
If you are unable to pay your rent, support is available to help you understand your cashflow, options, and consequences.
Understand your position
Start by reviewing your lease including any obligations and associated costs.
Get a clear understanding of:
Explore and evaluate your options to achieve your goals such as obtaining finance, asking to defer rent, selling assets or selling the business (if possible).
- Set goals and gather information for weighing up your options.
- Negotiating and mediating can save everyone time and money.
- Give specific dates and amounts you will pay to catch-up arrears.
Tips to resolve issues
Talk to the landlord as soon as you become aware that you cannot pay rent.
Struggling to pay rent
Ending a lease early
If you break the lease by ending it early (i.e., walk away), you may be liable for paying the rent owed from the day the lease is ended until the end of the agreed term of the lease.
To avoid a potentially long and expensive process of breaking a lease agreement, you may consider other options such as:
Consider impacts on any guarantors (the people (or other legal entities) who agree to be responsible for the debts of the tenant, should the tenant default).
Notice to Remedy Breach
If you do not pay rent, in accordance with the lease the landlord may issue you with a Form 7 Notice to Remedy Breach of Covenant (a Form 7 Notice) under the Property Law Act 1974 (the PLA)
The landlord must allow the tenant reasonable time to remedy the breach. A court can decide what is a reasonable time in the circumstances.
If the landlord fails to comply with the PLA when issuing a Form 7, a court may deem the notice to be invalid. An invalid notice is ineffective and would need to be reissued by the landlord.
Impact of inaction
Download the Not paying rent fact sheet.