Commercial Evictions in Queensland: Forfeiture and Re-entry

Evicting a commercial tenant in Queensland—legally known as "forfeiture of the lease" or "re-entry"—is a rigid legal procedure governed primarily by the Property Law Act 1974. Despite what a commercial lease agreement might claim, a landlord's right to lock a tenant out of their business is strictly regulated by statute and common law.

Section 124 of the Property Law Act 1974

Many commercial leases contain clauses stating that if rent is late, the landlord has an "immediate right of re-entry" to change the locks without notice. However, the application of these clauses depends on the nature of the breach.

Section 124 of the Property Law Act 1974 (Qld) governs the restrictions on forfeiture for most lease breaches. Importantly, Section 124(8) explicitly excludes non-payment of rent from the statutory notice requirements found in this section. For rent arrears, a landlord may exercise a right of re-entry as soon as the grace period specified in the lease (commonly 14 days) has expired, without the need for a statutory Form 7 notice.

The Notice to Remedy Breach of Covenant (Form 7)

For non-monetary breaches (such as failure to repair, unauthorized use, or illegal subletting), the landlord must personally serve the tenant (or serve at their registered corporate address) a Form 7: Notice to Remedy Breach of Covenant under s 124(1) of the PLA.

This critical legal document must explicitly state:

1. The exact breach that has occurred (e.g., failure to maintain the premises in good repair).
2. The specific action the tenant must take to remedy the breach.
3. The specific amount of compensation the landlord requires for the breach (if any).

As noted above, a Form 7 is not statutorily required for defaults involving the non-payment of rent.

The "Reasonable Time" Requirement

When a Form 7 is required for non-monetary breaches, the landlord must give the tenant a "reasonable time" to remedy the breach. What constitutes a "reasonable time" depends on the nature of the breach:

• For Non-Payment of Rent: The "reasonable time" requirement of s 124 does not apply. Instead, the landlord must wait for the grace period defined in the lease agreement to expire.
• For Non-Monetary Breaches: A reasonable time might be anywhere from 14 to 30 days, giving the tenant adequate time to hire contractors, perform repairs, or rectify the specific covenant violation.

Executing the Eviction (Forfeiture)

If the tenant fails to remedy the breach before the deadline (either the Form 7 expiry for non-monetary breaches or the lease grace period for rent) expires, the landlord has the legal right to execute forfeiture of the lease. In Queensland, this is typically done via Peaceful Re-entry.

Peaceful Re-entry

If the lease explicitly grants the landlord the right of re-entry upon default, the landlord (usually accompanied by a locksmith) can attend the commercial premises, typically outside of business hours.

To avoid criminal liability under the Criminal Code (Qld) ss 70-71, the re-entry must be "peaceable." This means the landlord cannot use force against persons to gain entry. Provided there is no physical confrontation or breach of the peace, they can change the locks and post a formal "Notice of Re-entry" on the front door.

From that moment on, the lease is forfeited. The tenant cannot return to the premises without the landlord's permission.

Relief Against Forfeiture

Commercial tenants have the right to apply to the Supreme Court of Queensland for "Relief Against Forfeiture."

If the tenant arrives at court, pays the outstanding rent, covers the landlord's legal costs, and demonstrates they can adhere to the lease moving forward, the court has the discretion to grant relief, ordering the landlord to reinstate the lease. The courts generally view forfeiture as a mechanism to secure the performance of lease obligations (like paying rent), not as a punitive measure to destroy a business.

Automating Default Procedures

Executing a commercial eviction requires an impeccable paper trail. If a landlord draws down on a bank guarantee instead of following the correct default procedure, they risk inadvertently waiving their right to forfeit. Landager provides institutional-grade ledger tracking, ensuring that when commercial rent hits arrears, property managers are automatically reminded of the specific grace periods in their lease and the correct statutory Form 7 workflow for non-monetary breaches, preventing procedural missteps that could invalidate a peaceful re-entry action.

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Additional Commercial Context for Queensland

The Retail Shop Leases Act 1994 (Qld) governs retail premises and ensures fairness by prohibiting "ratchet clauses" (s 36). Unlike residential tenancies, commercial and retail leases are not subject to a 4-week bond cap or a 12-month rent increase frequency limit; these matters are governed by the specific terms of the lease contract.

Mediation vs Litigation

The emphasis in Queensland is directed towards alternative dispute resolution via the Queensland Small Business Commissioner (QSBC) prior to formal litigation. Landlords cannot bypass the QSBC to take a tenant to court over a retail lease dispute without a mediation certificate, unless seeking specific types of urgent injunctive relief.

The Reality of Retail Act Obligations

Landlords of retail premises in Queensland must also be aware of disclosure obligations. If a disclosure statement is not served at least 7 days before entering the lease (s 22), the tenant may have the right to terminate within the first six months.

Furthermore, outgoings must be strictly audited. A lessor can only recover outgoings if they provide the lessee with an annual estimate of outgoings at least one month before the start of each accounting period, and an audited annual statement within three months after the period ends.

How Landager Helps

Navigating Queensland’s commercial regulatory environment requires precision. Landager's platform automates compliance for QLD commercial landlords by tracking lease-specific grace periods for rent defaults and generating Form 7 notices for non-monetary breaches. By maintaining an impeccable paper trail and ensuring all actions align with the Property Law Act 1974 and the Retail Shop Leases Act 1994, Landager helps property managers avoid the legal pitfalls of residential-style assumptions and ensures every eviction action is legally sound.