Commercial lease default notice: how long you have to fix it and how to fund the arrears

You opened an envelope or an email from your landlord’s agent, and it says you’re in breach of your lease. Take a breath. A default notice is a warning with a date on it. It isn’t termination, and in most cases the cheapest moment to sort out unpaid rent is right now, while the landlord still wants a tenant more than a vacancy.

The date that matters is the remedy date: the last day to fix the breach. This guide explains how it’s set, how to count it, what “fixed” really means for rent, and how to fund the arrears when the cash isn’t there.

What is a commercial lease default notice?

It’s a written notice from the landlord that says three things: which lease obligation you’ve breached, what you must do to fix it, and by when. Most commonly the breach is unpaid rent or outgoings, but it can also be insurance, repairs, trading hours or a missing bank guarantee.

The name changes by state. In Queensland it’s a Form 7 notice to remedy breach, which the Queensland Small Business Commissioner (QSBC) calls a “formal wake-up call” rather than a penalty. In other states you’ll see “notice of default”, “notice to remedy” or “breach notice”.

Where it sits in the sequence matters:

Stage	What it is	Your clock
Rent reminder or arrears email	Informal chase	None legally, but it’s your chance to talk
Default or breach notice	Formal notice of what’s wrong and the remedy date	The remedy date
Final warning or termination notice	Landlord says the lease will end or has ended	Short, set by the lease
Re-entry or lockout	Landlord takes back possession	Often none left

If you’re already behind but haven’t had a notice, our page on commercial rent arrears covers how to approach the landlord first.

How long is the remedy period?

Here’s the honest answer: it depends, and there’s no single national number.

• Queensland. QSBC says the landlord must allow a reasonable time, taking into account the nature and extent of the breach (Property Law Act 2023, s 153(2)). The legislation doesn’t set a fixed timeframe for each type of breach, so the period is whatever the notice states.
• Victoria. Notices that rely on the Property Law Act 1958 s 146 must specify the breach and, if it can be remedied, require you to remedy it. Your lease usually sets the period, and the Victorian Small Business Commission offers mediation for retail lease disputes.
• New South Wales. Section 129 of the Conveyancing Act 1919 sets the notice rules for most lease breaches, and it treats non-payment of rent differently from other breaches. So in NSW you shouldn’t assume a grace period exists unless your lease gives you one. Check the clause the landlord is relying on.
• Other states. The lease and state law apply. Retail leases have extra protections in most states, so first work out whether your lease counts as a retail lease.

Whatever the state, the notice and the lease are your two source documents. Put them side by side. Does the notice cite a clause that exists? Is the amount consistent with your rent schedule? Does the date match what the lease requires?

How do I count the days?

The remedy date is usually printed on the notice. What’s less clear is when the notice was served, because the lease often says how service works and when it’s treated as received.

1. Find the service clause in your lease. It will say whether notices can go by post, email or hand delivery, and to which address.
2. Identify the date you’d be treated as having received it. Posted notices often have a deemed delivery date. That can be earlier than the day you opened the envelope.
3. Mark the remedy date, then count back a week. Plan to pay or agree terms with a week to spare, not on the last day.
4. Check the address. A notice posted to an old address can be a real problem. Our guide on registered addresses and missed letters explains how this works for companies.

Drop the dates into the debt letter triage tool and it will show you the countdown in one place.

What counts as “fixing” the breach?

For rent, fixing it normally means the arrears stated in the notice are paid in full, in cleared funds, by the remedy date. A few practical points that avoid disputes:

• Pay exactly what the notice asks, including any interest or costs it lists, and ask which items you’re disputing in writing.
• Pay the way the notice says. If a bank transfer takes a day or two to land, send it early.
• Get written confirmation that the breach has been remedied and the notice is withdrawn.
• Keep paying new rent as it falls due. Clearing old arrears while missing the next instalment starts a fresh breach.

If you can’t clear it all, the alternative is a written payment deed or variation signed by the landlord before the remedy date. A text message that says “that’s fine” isn’t the same thing. Without a signed agreement, a part-payment may not stop the clock, and some leases say that accepting part-payment doesn’t waive the breach.

See if you qualify →

Who else is exposed if the lease goes wrong?

A default notice often reaches further than the shopfront.

• Bond or bank guarantee. Many leases let the landlord draw on it for arrears. Then you’ll need to replace it, usually on short notice.
• Personal guarantees. If you or another director guaranteed the lease, the landlord may turn to the guarantor if the company can’t pay. Our guide on demands under a personal guarantee covers that stage.
• Fit-out and stock. If the landlord re-enters, the fit-out you paid for is usually left behind, and stock can be hard to recover.
• Other creditors. Landlords aren’t the only ones watching. If rent is behind, wages, suppliers and tax often are too. A list of everything due is the first step, and the multiple creditors page shows how to rank them.

How can I fund the arrears before the remedy date?

Once you’ve confirmed you owe the money, there are three routes. Which suits depends on the amount, the days left and what you own.

Route	Best when	Watch for
Landlord payment deed	Arrears are manageable and you can show how you’ll catch up	It must be in writing and signed before the remedy date
Unsecured cash flow funding	Your turnover is steady and the arrears are a one-off hole	Sized on turnover and bank statements, so have 3 to 6 months ready. Typically $5,000 to $500,000. See unsecured rescue funding
Property-secured funding	There’s equity in a home or commercial property	Needs valuation, title searches and legal steps, so it takes longer. Between $20,000 and $5,000,000. See the caveat loan page

If the arrears are one of several debts, a funded creditor settlement or consolidation can clear them together, so one payment replaces many. We never promise funding will land before a particular date. It depends on the security, the documents and the days left, which is why a week matters.

An example (illustrative only)

A cafe owner falls two months behind after a slow winter. The landlord’s agent serves a default notice for the arrears, with a remedy date. The owner reads the service clause, finds the notice was emailed on a Friday and treated as received that day, and has less time than expected.

The owner calls the agent on Monday, confirms the exact arrears figure in writing, and applies for funding the same day with three months of bank statements to hand. The landlord agrees in writing not to proceed while the funding is arranged. The arrears are paid before the remedy date and the notice is withdrawn in writing. The key moves were: counting from service, talking early, and having documents ready.

What if the notice is wrong or I dispute the amount?

Not every notice is right. QSBC notes that a notice can be defective if it leaves out information the law requires, and it recommends urgent legal advice if you want to challenge one. Disputes over amounts, outgoings or “make good” charges are better raised in writing straight away, while paying the undisputed part.

Mediation is also available. QSBC reports that nearly 20% of its mediations in 2024–25 involved commercial lease notices, lockouts or evictions, and says mediation has helped landlords and tenants with active breach notices agree on a realistic plan. Victoria’s commission offers a similar service for retail leases.

Funding is for the case where the money is genuinely owed. If it isn’t, challenge the notice.

Ready to find out where you stand?

The landlord has given you a date, so the worry is now about days. Everything above is about using the time you have well, and one more thing can help: knowing early whether funding is a realistic option for your arrears.

Our enquiry takes about 60 seconds, and there’s no credit check when you enquire, so asking won’t affect your credit score. Your details aren’t passed to a pile of lenders, so your phone won’t light up with calls from strangers. A real person reads your situation, then calls you to talk through what could work and how long it might take.

One request: fill the form in accurately, including the arrears amount and the remedy date. That lets us match the right option the first time instead of going back and forth while the days run down.

Check your options →