Defective Notice to Remedy Breach prevents Landlord from evicting a tenant for Unpaid Rent
A recent Supreme Court of Queensland decision has stressed the importance for landlords to obtain proper legal advice from a competent commercial solicitor before attempting to terminate a commercial lease for reason of a lessee’s failure to pay rent.
Tyrrell & Tyrrell v Jesbro Enterprise Pty Ltd [2017] QSC 55 concerned a situation in which the lessors of a motel premises in Rockhampton, Mr & Mrs Tyrrell, applied to the Court to terminate a lease and seek orders for the eviction of their tenants who had failed to pay substantial rental arrears in excess of $166,000.00.
Mr & Mrs Tyrrell brought their application to the Court after correctly first serving a Form 7 - Notice to Remedy Breach of Covenant (“the Notice”) on the Lessee, Jesbro Enterprises Pty Ltd. The Notice had informed the Lessee about the status of the rental arrears and the Lessor’s intention to terminate the lease if the rental amounts were not repaid.
Unfortunately, the Notice to the Lessee did not provide all of the required information necessary to be effective under the Property Law Act. This included a key warning statement that had not been drafted in the approved terms and which had not been placed at the foot of the letter so as to be easily noticed by the Lessee.
Accordingly, despite the Court finding that the Lessee was in breach of its fundamental obligations under the lease by failing to pay substantial sums of rent, the Court refused to allow the Lessors the right to terminate the lease and enter into possession of their own property for reason of the defects contained in the Notice.
Fortunately for Mr & Mrs Tyrrell, after re-issuing a corrected Notice to Remedy Breach of Covenant on the Lessee and recommencing a new proceeding, they were successful in obtaining an order for possession of their motel premises at a later date. Nevertheless, the time and expense involved in this matter could have been significantly minimised (and an order for costs against the Lessee obtained), if the Lessors had taken proper legal advice on the Notice from the outset.
If you are a landlord of a commercial premises in Queensland who is owed money for rental arrears, then please contact Matthew Jones of our office immediately, to discuss your options in respect of recovering possession of your property and any amounts duly owed.
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