When Can a Landlord Terminate a Commercial Lease in Queensland?
A commercial landlord in Queensland can terminate a lease where a valid contractual or legal right to terminate has arisen, but a tenant’s breach does not automatically end the lease. The landlord must identify the relevant termination or re-entry right and comply with the applicable statutory process before taking possession. This matters particularly where rent is unpaid: changing the locks or treating the lease as terminated too early can turn a legitimate default into a dispute over whether the landlord’s termination itself was valid.
The current forfeiture and re-entry regime is principally contained in Part 9, Division 5 of the Property Law Act 2023, including the notice, re-entry and relief against forfeiture provisions in ss 149–162.
Section 150 limits the application of that Division: among other exclusions, for a lease of not more than one year it applies only in relation to an option to renew the lease or purchase its reversion. For commercial leases within the Division, the critical questions are therefore not simply whether the tenant has breached the lease, but whether that breach has triggered a right to terminate and whether the landlord has exercised that right in the manner required by the lease and legislation.
Rights for Commercial Landlord Termination
Not every breach of a commercial lease has the same legal consequence. The practical question is not simply whether the tenant has defaulted, but whether the lease gives the landlord a right of re-entry for that particular default and whether the statutory requirements for exercising that right have been satisfied. The table below shows why the lease must be checked before termination action begins.
| Tenant default or event | Does it automatically terminate the lease? | What the landlord should check |
| Rent or outgoings unpaid | No | Whether the arrears trigger the lease’s re-entry provisions and whether the required notice process has been completed |
| Insurance not maintained | No | The insurance covenant, default clause, re-entry provisions and whether the breach can be remedied |
| Unauthorised assignment or subletting | No | Whether consent was required, whether a breach occurred and what termination rights the lease provides |
| Prohibited use of premises | No | The permitted-use clause, seriousness of the breach and applicable re-entry provisions |
| Repair or make-good breach | No | What work is required, whether the breach is remediable and the reasonable period required by the statutory notice |
| Insolvency-related event | Not necessarily | The precise lease provision and whether the particular insolvency-related termination right is legally enforceable |
| Serious or repeated breaches | Not automatically | Whether contractual re-entry rights apply and whether the conduct may separately amount to repudiation or fundamental breach |
The Lease Is the Starting Point
Commercial leases usually define events of default, including unpaid rent or outgoings, failure to maintain insurance, unauthorised assignment or subletting, prohibited use, repair breaches, insolvency-related events where enforceable, and other material breaches of tenant covenants.
The critical distinction is between a breach occurring and a right to terminate arising. A landlord cannot assume that every breach automatically ends the lease or permits immediate re-entry. Similar attention to the precise lease machinery is required in other procedural disputes, including market rent reviews under commercial leases.
In Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14; (1985) 157 CLR 17 at 29–30, Mason J explained that, traditionally, even a breach of the covenant to pay rent did not itself give a landlord a right to re-enter unless the lease reserved that right. This makes the lease wording the first document to examine before termination steps are taken.
Forfeiture Versus Termination for Repudiation
A landlord may rely on an express contractual right of re-entry or forfeiture, or, in sufficiently serious cases, terminate under ordinary contractual principles for repudiation or fundamental breach.
The broader principles governing when a breach is sufficiently serious to justify ending the lease are considered separately in our guide to terminating a commercial lease in Queensland.
The High Court confirmed in Progressive Mailing House that ordinary contractual principles, including termination for repudiation or fundamental breach, apply to leases.
When Can a Landlord Terminate a Commercial Lease Legally?
It is also important to determine whether the lease is a retail shop lease under the Retail Shop Leases Act 1994 (Qld). Retail shop leases are subject to additional statutory rights and dispute-resolution procedures, although the forfeiture and re-entry provisions in the Property Law Act 2023 (Qld) remain central when a landlord seeks to terminate for breach.
Step 1: Establish a Right of Re-Entry
The first question is whether the particular default actually gives the landlord a right to re-enter. Section 152 of the Property Law Act 2023 (Qld) defines a “breach” for the forfeiture provisions to include an event of default under the lease that gives the lessor a right to forfeit.
This sequencing matters. In Lightbrim Pty Ltd v Speed Rise Pty Ltd [2003] QSC 334, the lease provided that the right of re-entry arose when rent remained unpaid for seven days. Mullins J found that those contractual conditions were cumulative and had to be satisfied before determination by re-entry. Although decided under the former legislation, the case illustrates why the precise default and re-entry clauses must be checked before commencing the statutory process.
Mullins J stated at pp 11–12:
Clause 13.1 (1) regulates the right of re-entry. It imposes conditions cumulative upon the relevant breach of the lease which the parties have agreed must be satisfied before determination of the lease by re-entry is effected.
In addition, the right of re-entry conferred by clause 13.1 is regulated by section 124 of the PLA. Relevantly, what triggers the right of re-entry under clause 13.1 (1) is that rent has been unpaid for 7 days…
… The express terms of clause 13.1 contemplate that the Landlord will comply with section 124 of the PLA after the right of re-entry has been triggered, but before it has been exercised.
Step 2: Give a Notice to Remedy Breach
Section 153 generally requires the landlord to give the tenant a notice to remedy breach in the approved form before exercising a right of re-entry. The notice must identify the nature and extent of the breach and, if the breach is capable of remedy, require the tenant to remedy it within a reasonable period. If the landlord claims reasonable compensation, the notice must state the amount, how it is calculated and a reasonable period for payment. It must also state that the landlord intends to terminate the lease if the breach is not remedied, or the compensation is not paid, within the applicable period. The landlord may exercise the right of re-entry under s 153 only if, at the end of the reasonable period stated in the notice, the breach remains unremedied or the reasonable compensation remains unpaid.
There is no universal cure period for every commercial lease breach. The statutory requirement is a “reasonable period”, assessed having regard to all the circumstances, including the nature and extent of the breach and, for a remediable breach, what the tenant must do or stop doing to remedy it.
Section 154 also requires the landlord to give a copy of the notice to each designated person for the lease whose name and address are known to the landlord. Designated persons can include guarantors, mortgagees, receivers, sublessees and certain assignors. However, s 154(2) expressly provides that failure to give such a copy does not prevent the landlord from terminating, re-entering or seeking relief from the court.
Exceptions and Special Circumstances
Section 156 provides a separate re-entry mechanism where the lessor reasonably believes the lessee has given up possession of the premises. The statutory requirements of that provision should be considered before treating apparent abandonment as permitting immediate re-entry.
Contractual notice and service requirements may also operate alongside the Act.
A tenant simply vacating the premises does not necessarily end its obligations under the lease, and the consequences of leaving early are considered in our guide to exiting a commercial lease early in Queensland.
Before serving a notice, the default clause, re-entry clause, statutory requirements and service method should therefore be checked together. A genuine default does not cure a premature or defective termination process.
Where the validity of a notice, termination or attempted re-entry is contested, the dispute may require consideration as part of a broader commercial lease dispute.
Can a Commercial Landlord Terminate a Lease Before or After a Lockout?
Changing the locks is often treated as shorthand for terminating a commercial lease, but legally the two issues must be separated. A lock change may form part of a lawful peaceable re-entry, but it does not create the landlord’s entitlement to re-enter. The right must already exist and the required process must have been completed.
Peaceable Re-Entry Under the Property Law Act
A commercial landlord may be able to lock a tenant out, but only after a valid right of re-entry has arisen and the applicable statutory requirements have been satisfied. Under s 157(2) of the Property Law Act 2023 (Qld), a landlord may exercise that right by peaceably re-entering the premises.
If peaceable re-entry is not possible, the landlord may make a written demand for possession. If the tenant refuses to give possession, the landlord may apply to the court to recover the premises.
In practice, peaceable re-entry may involve taking possession and securing the premises, including changing the locks. However, changing the locks is a consequence of exercising an existing right of re-entry. It does not itself create that right.
When Court Proceedings May Be the Safer Route
Where the tenant remains in occupation, the alleged default is disputed or recovering possession could involve confrontation, attempting physical re-entry carries obvious legal and commercial risk. The statutory demand-and-court process provides an alternative.
Where the landlord applies to the court for recovery of possession in exercise of a right to forfeit for breach, s 158 allows the court to make any order the nature of the case requires, including orders for possession, forfeiture of the lease, payment of amounts owing under the lease, reasonable compensation and the imposition of conditions on either party. Whether a particular re-entry is genuinely “peaceable” is fact-sensitive, making aggressive self-help particularly risky where possession is contested.
When Can a Landlord Terminate a Lease Unlawfully?
A purported termination may be invalid or ineffective where the landlord has a genuine complaint about the tenant but has not acquired, or properly exercised, the relevant right to terminate. Common problems include relying on a breach that did not occur, using a default that does not trigger re-entry, serving a defective s 153 notice, allowing an unreasonable remedy period, failing to comply with contractual or statutory service requirements, or re-entering before the required period expires.
Termination may also be challenged where the tenant remedied the breach in time or the landlord’s attempted re-entry was not peaceable. These risks make the sequence of default, notice, remedy period and re-entry commercially significant.
Does Acceptance of Rent Prevent a Landlord from Terminating a Lease?
Older authorities and commentary on waiver should be approached carefully under the current legislation. Section 155 of the Property Law Act 2023 (Qld) applies where a landlord accepts rent or another amount after giving the tenant a notice to remedy breach. In that situation, acceptance does not operate as a waiver of the landlord’s right to forfeit because of the breach, subject to any agreement to the contrary. The timing of the payment, the notice already given and the terms of the lease therefore remain important when assessing waiver.
An invalid termination can transform an arrears or breach dispute into urgent possession proceedings and potential claims against the landlord.
Can Tenants Challenge When a Landlord Terminates Their Lease?
Termination by re-entry is not necessarily final. Sections 160–162 of the Property Law Act 2023 (Qld) allow a tenant or another designated person to seek relief against an actual or proposed forfeiture.
A landlord recovering possession does not necessarily make the forfeiture irreversible. Queensland legislation allows tenants and certain other persons to seek relief against forfeiture, and where re-entry has already occurred there can be a short period in which action should be taken. This is important for both sides before the premises are re-let.
Relief Against Forfeiture
Section 160 provides for applications for relief against an actual or proposed forfeiture. Section 160(3)(a) specifies a one-month period following re-entry under s 156 or s 157(2)(a), subject to the court’s power under s 160(4) to extend that period. Where the landlord has instead applied to the court for recovery of possession, s 160(3)(b) requires the application for relief to be made before the court makes an order for possession.
Under s 162, the court may grant relief on conditions, including payment of amounts owing, reasonable compensation or compliance with other requirements.
The practical significance of relief proceedings is illustrated by Lightbrim Pty Ltd v Speed Rise Pty Ltd [2003] QSC 334, where a commercial tenant sought a declaration that its lease remained on foot or, alternatively, relief from forfeiture following rent default and attempted termination. The case concerned former s 124 of the Property Law Act 1974 (Qld), and Mullins J ultimately found the relevant notice invalid without determining the tenant’s alternative claim for statutory relief. It therefore provides procedural context rather than authority for the current ss 160–162 regime.
For landlords, this means re-entry should not automatically be treated as the end of the matter. Immediate re-letting can become commercially problematic if the former tenant promptly seeks relief and restoration of the lease.
Common Mistakes Seen in Commercial Lease Terminations
One common mistake is treating a termination threat as either automatically valid or automatically unlawful. In practice, the answer usually depends on classification under the RSLA, the lease wording, the notice history, the alleged breach, and whether the landlord has complied with Queensland property law requirements.
Treating Rent Arrears as Automatic Termination
A common mistake I see is assuming substantial rent arrears justify immediate termination. The amount owing does not remove the need to establish and properly exercise the right of re-entry.
Acting Before Checking the Lease and Notice
Changing the locks too early can create greater exposure than the original default. In practice, the contractual right should be checked to confirm that it has crystallised and that the required notice process is complete before any lockout or re-entry occurs.
Re-Letting Too Quickly
Re-entry may appear final, but a tenant can urgently seek relief against forfeiture. Committing the premises to a replacement tenant can complicate that dispute.
Ignoring the Tenant’s Goods
Stock, equipment, records and fixtures left behind create separate practical and legal issues. Recovering possession of the premises should not be treated as determining ownership of, or the landlord’s entitlement to deal with, property remaining inside. Those issues should be assessed separately from whether forfeiture itself was valid. Termination may also crystallise separate repair and reinstatement obligations, including the tenant’s make good obligations under the commercial lease.
Key Takeaways
A valid reason to terminate and a valid method of termination are separate questions. A landlord must establish the relevant contractual right, identify the qualifying breach and follow the applicable statutory process before recovering possession. Where s 153 applies, that includes allowing the required reasonable period to expire. Different requirements apply where s 156 permits re-entry because the tenant is reasonably believed to have given up possession. Even after re-entry, relief against forfeiture may remain available.
Frequently Asked Questions
Can a commercial landlord terminate a lease if rent is unpaid?
Yes, potentially. Unpaid rent may trigger a contractual right of re-entry, but non-payment does not automatically terminate the lease. The landlord must establish that the relevant termination or re-entry right has arisen and comply with the applicable requirements of the Property Law Act 2023, including the notice requirements where s 153 applies, before exercising that right.
Can a commercial landlord change the locks on a tenant in Queensland?
A landlord may be able to change the locks as part of a lawful peaceable re-entry under s 157 of the Property Law Act 2023. However, changing the locks does not create a right to terminate. The landlord must first have an enforceable right of re-entry and satisfy the applicable statutory requirements.
What happens if a landlord terminates a commercial lease without following the correct procedure?
The termination may be challenged as invalid. This can lead to urgent possession proceedings, applications for relief against forfeiture and potential claims against the landlord. A genuine tenant default does not necessarily cure defects in the landlord’s termination process, particularly where required notices or remedy periods were not observed.
How long does a commercial tenant have to remedy a lease breach in Queensland?
There is no universal remedy period for every commercial lease breach. Section 153 of the Property Law Act 2023 (Qld) requires the notice to specify a reasonable period for remedying a remediable breach. What is reasonable depends on the nature and circumstances of the particular default.
What should I do if I receive a notice to remedy breach of my commercial lease?
Check the alleged breach, the relevant lease clauses, what the notice requires, and the deadline immediately. If the breach is remediable, remedying it within the specified period may prevent the landlord from exercising the right of re-entry on that basis. Disputed or defective notices can raise separate issues, so delay can materially affect the available options.
Can a tenant get a commercial lease back after the landlord has re-entered?
Potentially. Sections 160–162 of the Property Law Act 2023 (Qld) provide for relief against forfeiture. Where the landlord has already re-entered under s 156 or s 157(2)(a), the legislation specifies a one-month period for applying for relief, although the court has power to extend that period.
What happens if a commercial tenant refuses to leave after a landlord terminates the lease?
Where peaceable re-entry is not possible, s 157 provides a pathway for the landlord to make a written demand for possession and, following refusal, apply to the court to recover possession. A landlord should not assume that a termination right permits forcibly removing an occupying tenant.
Does accepting rent after a breach stop a landlord from terminating the lease?
Not automatically. Under s 155 of the Property Law Act 2023 (Qld), if a landlord accepts rent or another amount after giving a notice to remedy breach, that acceptance does not itself waive the right to forfeit because of the breach. However, s 155 is subject to any agreement to the contrary, so the lease terms and circumstances still need to be checked.
Can a landlord terminate a commercial lease for any breach?
No. A breach and a right to terminate are different. The landlord must identify a contractual or other legal basis permitting termination for the particular circumstances. In Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14; (1985) 157 CLR 17 at 29–30, Mason J explained that, traditionally, even a breach of the covenant to pay rent did not itself give a landlord a right to re-enter unless the lease reserved that right. This makes the lease wording the first document to examine before termination steps are taken.
What happens to a tenant’s stock and equipment after a commercial lockout?
Re-entry does not automatically resolve ownership or entitlement to goods remaining inside the premises. Stock, equipment, records and tenant fixtures can create separate legal and practical issues. Landlords should distinguish securing the premises from dealing with the tenant’s property rather than assuming termination of the lease gives unrestricted rights over everything left inside.
