What Issues do Landlords Typically Face?

In Short

• Landlords must issue written notices detailing lease breaches and provide tenants a reasonable timeframe to remedy them before taking further action.

• Self-help evictions, such as changing locks without notice, can lead to legal consequences for landlords, including trespass or breach of lease claims.

• Not all breaches justify lease termination. It is essential to distinguish between minor breaches and fundamental or repudiatory breaches that may warrant ending the lease.

Tips for Businesses

If a tenant breaches a lease, first identify the breach type and consult the lease terms. Issue a clear, written notice specifying the breach and allowing a reasonable period for remedy. Avoid taking direct action like changing locks without following legal procedures, as this can result in legal liabilities.

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Table of Contents

• What is Eviction?
• Re-Entry
• Fundamental Breaches or Repudiation
• Requirement to Give Notice
• Tips for Landlords 
• Key Takeaways
• Frequently Asked Questions

For landlords, there is nothing more frustrating than a tenant who has not paid their rent. Depending on the terms of the lease agreement, you may have the right to evict the tenant when they fail to pay their rent or have breached other terms of the commercial lease. Your lease agreement will likely contain a procedure to ensure your eviction is lawful. If you fail to adhere to this procedure and your tenant challenges you, the court may not uphold your eviction. This article explains what breaches give rise to a right to evict a tenant. 

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What is Eviction?

Eviction occurs when the landlord re-enters the premises by changing the locks and subsequently removes the tenant from the premises, thus terminating the lease. Remember that not all breaches of the agreement give rise to the right to evict, and one of the following three criteria must be present to warrant an eviction:

1. The breach must give rise to a right to re-entry or termination. 
2. The breach must be considered fundamental or essential. 
3. The tenant’s breach must be regarded as a repudiation or disclaimer of the lease.

Re-Entry

All leases typically have a re-entry clause to allow the landlord’s right to terminate the lease as well as to seek damages where the tenant has breached the agreement. Express clauses for re-entry are commonly used so that the landlord can repossess the premises and terminate the agreement.

Notices of termination need to be legally valid and factually correct. They must clearly state the tenant’s breach and refer to the relevant re-entry clause. You must not give another reason for the re-entry, such as that the lease had already come to an end for some other cause.

Timing

Timing is a key element in re-entry. A statement of intention to re-enter is not itself considered re-entry and if the method of re-entry occurs too early in the lease-prescribed timeframe, it may be considered invalid.

Fundamental Breaches or Repudiation

Termination of a lease for a fundamental or essential breach works the same way as in general contract law. The landlord must notify the tenant that they are terminating the lease due to a breach. Usually, a commercial lease will stipulate when a fundamental or essential breach will have occurred.

Requirement to Give Notice

Both these situations require the landlord to give the tenant written notice. If a landlord wishes to terminate the lease because the tenant has breached the agreement, the landlord must give the tenant written notice. Under section 129 of the Conveyancing Act 1919 (NSW), the written notice must state clearly the particulars of the breach and must require that the tenant remedy the breach or provide compensation to the landlord within a reasonable amount of time.

When specifying the action that the tenant must take to remedy the breach, you cannot ask the tenant to do more than what they would normally be required to do under the lease. 

Tips for Landlords 

• Establish the Nature of the Breach: Check your lease to see if the breach allows termination. Speak to our leasing lawyers for advice. If termination isn’t an option, identify the appropriate remedy and what the tenant must do.
• Avoid Taking Back the Premises Without Proper Procedure: Entering the premises without following the correct process can be considered trespassing. Unlawful eviction may breach the tenant’s right to quiet enjoyment and could result in legal consequences.
• Issue a Notice: Once you understand your rights, issue a written notice to the tenant outlining the breach and required remedy. Allow a reasonable timeframe and explain the consequences of non-compliance. Use your lease agreement as a guide for the next steps.

Key Takeaways

Landlords must carefully follow legal procedures when evicting a tenant to avoid potential legal issues. Not all breaches warrant eviction. The breach must meet specific criteria, such as being fundamental or giving rise to a right of re-entry. Always check your lease for the correct eviction process, including issuing a legally valid and factually accurate notice. Re-entry must occur at the appropriate time to be lawful. If a tenant has breached the lease, written notice is usually required, except for non-payment of rent under certain circumstances.

If you require assistance removing a tenant, our experienced leasing lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions