COVID-19 UPDATE: Leaving Leases and Resolving Lease Disputes

The COVID-19 pandemic came as an unexpected shock to the world. It has affected everyone in one way or another. One group heavily impacted by COVID-19 has been retail and residential tenants. In response to the effects of COVID-19 on retail and residential tenants in Queensland, the Government passed a moratorium. This moratorium dealt with the eviction of both retail and residential tenants (on the grounds of financial hardship suffered). The moratorium had the purpose of lessening the blow of COVID-19 on retail and residential tenants. Part of the moratorium was lifted on 30 September 2020 but a large proportion of protections for tenants and landlords have remained. In Queensland, these protections are governed by multiple pieces of legislation.1  

  1. RESIDENTIAL 

There are two key types of agreements governed by the Residential Tenancies and Rooming Accommodation Act 2008 (“RTA Act”). The first type of agreement is referred to as a ‘residential tenancy agreement’. This is defined under section 12 of the Act to mean an agreement under which a person gives to someone else a right to occupy residential premises as a residence. The second type of agreements governed by the RTA Act are referred to as ‘rooming accommodation agreements’ under which providers provide rooming accommodation to a resident in a rental premise.2 Rooming accommodation is accommodation where occupation involves access to one (1) or more rooms but not to the whole of a rental premises.3 An example of this scenario is where household owners lease one portion of their home to another. There are certain exceptions to this definition such as but not limited to aged care accommodation, student accommodation, private hospital accommodation.4 The RTA Act allows rooming accommodation agreements to operate as residential tenancy agreements, provided the accommodation agreement states this is the case and it is signed by the relevant parties.5 

Any reference to a residential tenancy is a reference to a residential tenancy under a residential tenancy agreement, unless there are exceptions specified in the RTA Act.6 References to a residential agreement are references to both a residential tenancy agreement and a rooming accommodation agreement.7 For the most part, the RTA Act applies to all residential agreements, however, residents and landlords should be aware of the differing rights afforded in either kind.8 

Dispute Resolution 

Tenants or landlords of a residential agreement should, on first instance, try to negotiate with each other should any disputes arise in relation to the tenancy agreement. Negotiation and open communication between parties to a dispute will often prove to be beneficial in the long run (by aiding the cheap and efficient resolution of disputes). Other methods of resolution, such as litigation, may incur costly fees and take a long time. Where parties are unable to reach an amicable arrangement through negotiation, it may be necessary to undertake conciliation with a view to reaching a resolution.9 

Conciliation can be administered by the Residential Tenancies Authority (RTA) which is responsible for administering the RTA Act and its subordinate legislation.10 RTA conciliators are impartial participants in the conciliation process whose role involves guiding disputing parties in reaching a mutual understanding. Importantly, conciliators do not offer advice to either party in dispute but rather rely upon the principles of neutrality and party self-determination in order for agreements to be reached.  

In ‘urgent’ circumstances, there is the option for parties to apply directly to QCAT for disputes to be resolved, bypassing mandatory conciliation requirements.11 The most relevant circumstances for urgent applications include:12 

  • A failure to leave; 
  • A failure to leave as intended; 
  • A failure to remedy breach; 
  • Excessive hardship; 
  • Damage or injury; 
  • Objectionable behavior; or 
  • Repeated breaches. 

Once an application is made to QCAT and accepted, the tribunal will commence proceedings to resolve the dispute.13 A notice of unresolved dispute will be issued by RTA conciliators if the matter is non-urgent, and agreement cannot be made during conciliation.14 

Reletting Properties 

Further, from 30 April 2021 provisions under the RTA COVID Emergency Regulation now allow for property owners to relet their properties. Previously, owners who had suffered financial hardship due to COVID-19 could not relet properties once issuing current tenants with a notice to leave or a notice of intention to leave. This was done to prevent owners from evicting and replacing unwanted tenants given the circumstances of the COVID-19 pandemic. In limited circumstances, owners may now relet their property after issuing a notice to leave or a notice of intention to leave within the relevant time period. Such circumstances may include being unable to sell their property after reasonable attempts to do so or if a contract of sale is ended without the sale of the property.15 

Tenants Experiencing Domestic Violence  

If a tenant is experiencing domestic violence and believes they cannot safely continue to occupy a rental premises, the tenant may end the accommodation agreement by giving notice to the owner.16 This notice must be accompanied with supporting evidence which may include a protection order, temporary protection order, police protection order or interstate order.17 Evidence may also include a report about domestic violence signed by a doctor, social worker, solicitor or domestic violence support worker.18 

Other Considerations 

There are protections in place for tenants experiencing financial hardship due to COVID-19 which will remain until the earlier of 30 September 2021 or the end of the declared public health emergency. In order to be eligible for these protections, impacted tenants cannot be listed on a tenancy database. Tenants are listed on a tenancy database if they are unable to pay some or all of their rent during the COVID-19 emergency period. These databases are used to protect lessors from entering into residential agreements with tenants that are a risk of breaching the terms of agreement. There are general restrictions in place that govern how tenants may be added to such databases. For example, tenant personal information must not be listed in a database unless the residential agreement has ended.19Further, eligible tenants are only required to pay a maximum of one (1) week’s rent for break lease costs. To be eligible for this cap on costs, tenants must have lost 75% of their income and have less than $5000.00 in savings. 

  1. RETAIL 

Currently, attempts at dispute resolution must be made before a claim can be brought in the QCAT.20 Dispute resolution, similar to that required in residential tenancy disputes, includes negotiations and mediation. During negotiation, it is important that all parties act in good faith to reach an amicable resolution. To act in good faith involves acting honestly, reasonably, and openly. Intimidatory actions or unreasonable demands are a breach of the good faith provisions. If negotiations are unsuccessful, mediations are the next process parties must rely upon to resolve disputes. Before commencing mediation, a notice of dispute must be provided to the small business commissioner.21  

Eligible lease disputes are resolved by the small business commissioner and may potentially be referred to QCAT. Eligible lease disputes include “affected lease disputes” and “small business tenancy disputes”.22 

An “affected lease dispute” is a dispute that arises from an “affected lease”, where an “affected lease”: 23 

  • Is a retail shop lease or a prescribed lease (where the leased premises are wholly or predominantly used for carrying on a business);  
  • Was current and binding on the tenant from 28 May 2020 onward (this includes any form of lease, sub-lease, license or other agreement including verbal to occupy premises, all of which are considered binding on the tenant); 
  • Involves a tenant under the lease that is an enterprise that carried on a business (or non-profit activity) in the current financial year and had a turnover that was less than $50 million for the 2019–20 financial year and/or turnover is expected to be less than $50 million for the 2020-21 financial year; or 
  • Involves a tenant that is eligible for, but not necessarily enrolled in, the Job Keeper Payment scheme. 

A small business tenancy dispute is a dispute about a small business lease, or about the use or occupation of the leased premises, where a small business lease is: 

  • a lease under which the leased premises are to be wholly or predominantly used for carrying on a small business; or 
  • A small business is carried on by a sole trader or a business which employs fewer than 20 full-time, or equivalent full-time employees.  

QCAT may hear an “eligible lease dispute” unless:24 

  • the dispute is about an issue between the parties that is the subject of retail shop lease arbitration or has been dealt with by arbitration or is before, or has been decided by, a court; or 
  • the dispute relates to a lease of premises used for the carrying on of the business of a service station which operates under a fuel-reselling agreement (a service-station);25 or 
  • the amount, value or damages in dispute is more than the monetary limit which is currently $25,000.00.26 

If there is an eligible lease dispute, parties may make an application for an order to resolve a tenancy dispute (form 43). This application must be accompanied by a notice of dispute to the Chief Executive (form 4). The Chief Executive is simply the Small Business Commissioner.27 

An order that one party pay another compensation for the loss of rent or loss of some other kind can be made by QCAT for an eligible lease dispute. These orders are consistent with s 44 of the RSL COVID Emergency Regulation, which may include  

Often, the processes and grounds for leaving a tenancy are subject to directions and requirements by authorities including the Retail Tenancies Authority, Small Business Commissioner, QCAT and instruments of legislation. These tend to change regularly. As such, if you are considering leaving your tenancy or are a landlord considering the termination of the tenancy over your property, it is crucial to understand these processes in order to determine whether you are legally entitled to terminate a tenancy. 

If you require further assistance or clarification with any tenancy or retail related legal issues or if your lease agreements have been impacted by the COVID-19 pandemic, please contact our firm, and speak to one of our specialized Lawyers. 

This article was written by Kerry Copley and Mateo Gonzalez


1 Retail Shop Leases Act 1994 (Qld) (‘RSL Act’); Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Qld) (‘RSL COVID Emergency Regulation’); Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (‘RTA Act’); Residential Tenancies and Rooming Accommodation (COVID-19 Emergency Response) Regulation 2020 (Qld) (‘RTA COVID Emergency Regulation’). 

2 RTA Act s 16. 

3 RTA Act s 15. 

4 RTA Act s 44. 

5 RTA Act s 18. 

6 RTA Act s 23. 

7 RTA Act s 19. 

8 See RTA Act chs 3 -4. 

9 RTA Act s 416. 

10 RTA Act pt 2. 

11 Ibid. 

12 RTA Act s 415. 

13 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 36. 

14 Residential Tenancies Authority, ‘Applying for dispute resolution’, Dispute resolution (Web Page, January 2021) < https://www.rta.qld.gov.au/disputes/dispute-resolution/applying-for-dispute-resolution>. 

15 RTA COVID Emergency Regulation s 75. 

16 RTA COVID Emergency Regulation s 59. 

17 RTA COVID Emergency Regulation s 65. 

18 Ibid. 

19 RTA Act s 459(1)(b). 

20 RSL COVID-19 Emergency Regulation s 41. 

21 RSL COVID Emergency Regulation s 26; Business Queensland, ‘Dispute assistance finder’, Resolving Business Disputes (Web Page, 1 October 2020) <https://www.business.qld.gov.au/running-business/marketing-sales/managing-relationships/resolving-disputes/assistance-finder>.  

22 RSL Covid Emergency Regulation s 21. 

23 Business Queensland, ‘ Negotiating commercial rent relief during COVID-19’, Queensland Small Business Commissioner (Web Page, 26 April 2021) <https://www.business.qld.gov.au/running-business/support-assistance/qsbc/negotiating-rent-relief>; s 5 of RSL COVID Emergency Regulation 

24 RSL COVID Emergency Regulation s 42. 

25 RSL Act s 97(c); Competition and Consumer (Industry Codes—Oil) Regulations 2017 (Cth) cl 5. 

26 Uniform Civil Procedure Rules 1999 (Qld) sch 3, definition minor claim

27 RSL Act s 55. 

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