The Property Law Act 2023 (Qld) will take effect from 1 August 2025, delivering the most comprehensive overhaul to leasing law Queensland has seen in decades. These reforms aim to clarify and modernise how leases are negotiated, enforced, and assigned.
If you’re a landlord, tenant, agent or advisor, these changes will impact your lease documents and day-to-day dealings, particularly when it comes to landlord consent, assignments, enforcing breaches, and managing liability.
Clearer process for seeking landlord consent
Tenants will need to follow a formal process when seeking a landlord’s consent to matters such as:
- assigning the lease to another business operator;
- subleasing part of the premises to a related entity;
- carrying out major fit-out works, such as installing internal walls or kitchen equipment;
- changing the permitted use, for example from a retail shop to a café; or
- registering a mortgage over their leasehold interest.
To do so, the tenant must issue a Proposal Notice with all required information. If more details are needed, the landlord may formally request them. Once satisfied, the landlord must respond within one month by issuing a Decision Notice, which must:
- confirm whether consent is granted or refused;
- set out any conditions imposed; and
- provide reasons for the decision.
Importantly, consent must not be unreasonably withheld, and any unjustified refusal or delay can be challenged in court. These obligations cannot be contracted out of, meaning lease clauses that allow the landlord to simply ‘act in its absolute discretion’ will no longer be enforceable in this context.
Mandatory form for lease breaches
From 1 August 2025, landlords must use a new prescribed Form 7 – Notice to Remedy Breach when dealing with a tenant’s breach of the lease.
The timeframe for compliance must still be reasonable, taking into account factors such as:
- the nature and seriousness of the breach;
- what the tenant needs to do to fix it; or
- any prior warnings or conduct.
Example: If a tenant fails to pay rent, a landlord may issue a Form 7 notice giving 14 days to remedy the breach. For a more complex breach (e.g. unapproved building works), a longer timeframe may be necessary.
Additionally, landlords must now provide a copy of the breach notice to all relevant “designated persons”, including:
- mortgagees of the tenant’s interest (e.g. banks);
- guarantors of the lease;
- any known subtenants; and
- mortgagees of any subleases.
This ensures that parties with a financial stake in the lease are kept informed of any risk of termination. While failure to notify does not invalidate the notice, it may have practical implications, especially if enforcement is later challenged.
New protections around options to renew or purchase
If a lease includes an option to renew or a right of first refusal to purchase the freehold, and the landlord wishes to withhold that right due to an alleged tenant breach, the Act imposes strict requirements.
A formal breach notice must be issued within 10 business days of either:
- the tenant exercising the option or right; or
- the breach occurring (if it happens after the notice is given).
The tenant then has one month to seek court relief to preserve their renewal or purchase rights.
Example: A tenant gives notice to exercise a 5-year renewal option. The landlord believes there has been a minor breach of make-good obligations and wishes to refuse the renewal. Under the new rules, the landlord must act swiftly and issue a breach notice within 10 business days.
Automatic release from liability after subsequent assignment
One of the most significant changes in the Act is the automatic release of outgoing tenants and guarantors in a chain of assignments.
Under the current law, a tenant may remain liable even after they’ve assigned the lease, if the incoming tenant later assigns it again, and the new assignee breaches the lease.
From 1 August 2025, once a lease has been assigned twice, the original tenant and any guarantor are automatically released from liability for breaches that occur after the second assignment, even if the lease says otherwise.
This change provides critical protection for business sellers and their guarantors, particularly in long-term or high-value leases.
Covenants will follow the lease – unless carved out
The Act also confirms that lease covenants automatically bind an assignee, regardless of whether the obligation “touches and concerns the land”.
This includes both positive obligations (e.g. pay rent, maintain premises) and restrictive ones (e.g. not change use, not install signage without consent).
There are however limited exceptions. A covenant will not bind an assignee if:
- the lease states it’s personal to the original tenant;
- the parties expressly agree the benefit stays with the original tenant; or
- the landlord consents to it not passing on.
What should landlords and tenants do now?
These changes require all stakeholders, especially landlords, agents, and commercial tenants to review and update lease precedents, consent procedures, and enforcement workflows before the new law commences.
Our team at McTaggart Grant Lawyers is actively working with clients to ensure their documents and processes are compliant and fit for purpose.
If you would like help reviewing your leases or understanding how the Act impacts your rights and obligations, get in touch with our Property specialist team today.
About McTaggart Grant Lawyers
McTaggart Grant Lawyers is a boutique corporate, commercial and property law firm founded by former top-tier lawyers Ben McTaggart and Mary Grant. Our lawyers are specialists and we partner with our clients to deliver expert, timely and commercially astute advice with a relentless focus on quality. We work with founders, business owners, family offices and corporations Australia-wide across a range of industries, including childcare, property development, private capital, franchising, medical and allied health services and retail. We are proudly headquartered on the Gold Coast and deliver our services locally and remotely to interstate clients using modern technology.