When is a Notice to Remedy a Breach in a Commercial Tenancy Required?

It is important to be aware of what is written in your commercial lease, especially to ensure that you meet your obligations under the lease. Your commercial lease will usually include clauses that explain when a notice to remedy a breach must be sent. This article explains when the landlord is required to send a notice to remedy. It also explains what the tenant should look for in their commercial lease to determine how they should respond to a notice.

What is a Breach?

A breach happens when one party does not comply with a specific obligation set out in a lease. While the terms ‘breach’ and ‘default’ may be interchangeable, some commercial leases define ‘default’ specifically. For example, it is a breach to not pay rent by the due date. However, the lease may say this is only a default if rent is not paid within 14 days of the due date. Therefore, it is essential for a tenant to review the lease. The landlord may only have certain rights (e.g. to terminate the lease or enter the premises) if a tenant is in default.

What is a Notice to Remedy a Breach?

Notice to remedy a breach is usually a written notice from the landlord to the tenant, setting out the:

1. facts surrounding the breach of the lease, e.g. late payment of rent;
2. details of how the tenant can remedy the breach;
3. timeframe at which the tenant should remedy the breach; and
4. consequences of failing to remedy a breach.

These are the common characteristics of a notice to remedy a breach. However, the lease may include specific terms that define what the notice should include.   

Can the Tenant Issue a Notice to Remedy a Breach?

The majority of commercial leases do not provide a provision for tenants to issue a notice to remedy a breach to the landlord. However, if the tenant believes the landlord has breached the lease, nothing prevents them from issuing a similar notice to the landlord to remedy a breach. If a commercial lease includes a clause that defines the format of a notice to remedy, the tenant should follow this format.

When is a Notice to Remedy a Breach Required?

The lease will typically include a requirement to provide a notice to remedy a breach if one party believes the other is in breach of the commercial lease. The inclusion of such a clause benefits the tenant as it shows that the landlord is willing to provide you with the chance to remedy a breach before terminating the lease. 

What Should a Commercial Tenant be Looking Out For?

To determine how their commercial lease treats breaches, a tenant should review the lease and consider the:

1. obligations of the lease;
2. timeframe to remedy a breach before the landlord serves a notice to remedy;
3. timeframe to remedy a breach before the landlord can exercise certain rights such as eviction; and
4. the minimum period they have to remedy a breach after receiving a notice.

In a commercial lease, there is no legislation that imposes a minimum standard for what the lease may contain. This makes it even more important to thoroughly review the lease to determine the potential rights and obligations.

Key Takeaways

A landlord will send a notice to remedy a breach when the tenant fails to fulfil an obligation of their commercial lease. The lease will define when the landlord can send a notice to remedy, so the tenant should pay careful attention to these terms. The notice to remedy allows the tenant to fix the breach before the landlord takes more serious action such as eviction.

If you have any questions or need assistance in drafting reviewing your commercial lease, contact LegalVision’s leasing lawyers on 1300 544 755 or fill out the form on this page.