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General Counsel → Leases → Remedies on default
Overview — Remedies on default

Catherine Hallgath, Partner, Mills Oakley Lawyers

Events of default

"Default" is another term for “breach of lease”. A lease will generally specify the actions a landlord is entitled to take if the tenant is in default. This guidance note provides examples of common defaults under leases. See Events of default.

Landlord’s remedies

The landlord's remedies for a breach of lease arise from two sources:

  • common law; and

  • the lease. A lease will often expand on the rights of the landlord under common law.

This guidance note examines the remedies typically available to and used by landlords at common law and in a lease, such as damages and termination for breach of an essential term. Also examined is the ability of the landlord to:

  • rectify the tenant's breach;

  • charge interest; and

  • to terminate the lease (particularly by re-entry).

A landlord must give notice in accordance with the relevant statute before terminating a lease. This is despite anything to the contrary in the lease. The guidance note examines what is required for a notice to be valid and what happens if a notice is invalid.

The provisions of the legislation throughout Australia are similar, with the exception of the procedure for termination of a lease for the non-payment of rent alone. The guidance note contains a checklist of the procedure for terminating a lease by re-entry.

The legislation does not apply to all types of leases and will not apply to the breach of some conditions contained in a lease. The relevant section of each piece of legislation specifies the leases, and covenants and conditions within a lease, that the relevant legislation does not apply to. See Landlord’s remedies.

Tenant’s remedies

If a landlord exercises its right to re-enter the premises and terminate the lease, the tenant may apply to the court to reinstate the lease. This relief is granted by legislation and is known as "relief against forfeiture of the lease". The legislation around Australia is similar.

The right to relief is discretionary. This guidance note examines the questions a court will ask when considering whether or not to exercise its discretion to grant a tenant relief against forfeiture, as well as the practical steps each party needs to take whether or not relief against forfeiture is granted. See Tenant’s remedies.

Shared remedies

This section focuses on remedies that may be available to either party to the lease such as:

  • dispute resolution;

  • termination for fundamental breach;

  • seeking a court order for specific performance; or

  • as to the meaning of a provision in a lease, seeking an injunction and the right to damages.

The section examines when a remedy may be available and practical issues surrounding the use of some of the remedies. See Shared remedies.




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