When a lease is breached

The new Property Law Act has procedures landlords must take if wanting to cancel a tenant's lease, as Farmer Freddy has discovered.

Pebbles is driving passed Freddy's farm one Sunday morning and decides to pop in to see her father for a coffee. She finds Freddy flicking through one of her old university law books, looking more furrowed than usual.

"What have you got there, Dad?" she asks, "Thinking about starting a new career?"

"Very funny, Pebbles. No, I'm just checking I've got my facts straight before I go and see my neighbour, Roger".

"Sounds serious" remarks Pebbles. "What's the problem?"

"You know that old paddock and cowshed I leased to Roger last year", says Freddy. "Well, Roger hasn't paid this month's rent, he's not been returning my calls and I've been reading in this old property law book of yours that I can go in there, cancel the lease and take some of Roger's possessions in order to obtain payment of the rent he owes me. I think that last bit is called distraint?"

"Crikey, Dad", says Pebbles. "I wish you would come and see me before you jump headlong into these things". "Those books are all out of date now, and the law has changed!"

"Under the new Property Law Act, you can't just walk in there and take Roger's things or cancel a lease without giving notice to the tenant".

"So what am I supposed to do?" sobs Freddy.

"Well", says Pebbles, "the new Property Law Act sets out rules for landlords wanting to cancel leases that their tenants have breached. The relevant sections of the act are a code that must be followed very carefully before a lease can be cancelled".

"Sounds like it could be a complicated process", says Freddy.

"You're not wrong there Dad", says Pebbles". "If you don't comply strictly with the procedures set out in the act, you run the risk that the courts will find you have breached the act and you could be the one paying damages".

"So what are my next steps?" asks Freddy.

"First," says Pebbles, "the rent payment must be at least 10 working days overdue".

"Second, you should instruct your lawyer to prepare the necessary Property Law Act notice to be served on Roger."

"Third, if the breaches have not been remedied within the specified time period set out in the notice, you can proceed to cancel the lease by either applying to the courts or by peaceable re-entry. Your lawyer will be able to explain these procedures to you in more detail though".

"Thanks, Pebbles," says Freddy. "Clearly, there's more to those leases than what the non-eagle eye can see!"


The content of this document is necessarily general and readers should seek specific advice on particular matters and not rely solely on this document.
If you would like more information on any of the topics in this document, please contact your usual Auld Brewer Mazengarb & McEwen adviser.
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