Breaking a Commercial Lease Early in Queensland, The 2026 Guide

The lease is signed and the business has moved on, at least in your mind. A new opportunity has come up, or the premises no longer fit the operation, and ending the lease early is the only way forward. In Queensland, a commercial lease is a binding contract, and neither party is ordinarily entitled to end it simply because their circumstances changed, according to the Queensland Small Business Commissioner.

That said, tenants and landlords do exit leases early every year in Queensland, and there are three recognised legal pathways to do it: negotiated surrender, assignment to a new tenant, and termination for breach. Each works differently, each carries its own risks and costs, and which one applies depends on what the lease says and how the other party responds.

Our lawyers in Springfield help clients across Greater Springfield and Ipswich with commercial lease disputes and early exits. Here is how the process generally works in Queensland, and what the key decisions look like.

This article is general information only and is not legal advice. Every situation is different, and you should speak with a solicitor about your own circumstances.

Can a commercial lease be ended early in Queensland?

A commercial lease generally cannot be ended early by either party unless the lease allows for it, both parties agree, or one party is in serious breach, according to the Queensland Small Business Commissioner. The lease is a contract, and the starting point is always what the lease document itself says.

That principle holds for standard commercial leases across Queensland, whether the premises are in a strip shopping centre, an industrial estate, a professional suite, or a retail shopping centre. For leases in a retail shopping centre or used wholly or predominantly for a retail business under 1,000 square metres, the Retail Shop Leases Act also applies and adds specific rights that are not available under general commercial leases. That distinction matters, because tenants in retail premises have statutory exit options their counterparts in non-retail premises do not.

The Queensland Small Business Commissioner notes that commercial lease early exits represented around 15 percent of its mediations in 2024 to 2025, which gives some sense of how common the issue is and how often parties reach a resolution without going to court.

What are the three pathways for ending a commercial lease in Queensland?

The Queensland Small Business Commissioner identifies three main pathways when a party wants to exit a commercial lease early: surrender by agreement, assignment to a new tenant, and termination for breach of the lease.

Surrender: this is a negotiated exit where both the landlord and the tenant agree in writing to end the lease before its expiry date. The Queensland Small Business Commissioner notes that landlords generally will not agree to a surrender unless the lease is in good standing, and the exiting tenant may still owe rent to the agreed end date, outgoings and damages even after the agreement is signed. The terms of a surrender are entirely negotiable, which means the outcome depends heavily on how each party is positioned and what they are willing to accept.

Assignment: the tenant finds a new tenant to take over the lease, with the landlord's consent. Under Queensland's Property Law Act 2023, the landlord must respond within one month of receiving all necessary details, and consent cannot be unreasonably withheld, according to the Queensland Small Business Commissioner. If the landlord takes too long or refuses without good reason, the tenant can apply to the court. A key benefit of assignment is that after a further assignment the first tenant and its guarantors are generally released from liability for anything that happens afterwards.

Termination for breach: where one party has seriously breached the lease, the other may be entitled to terminate. Under the Property Law Act 2023, re-entry is available where the landlord reasonably believes the tenant has given up possession. Formal breach and termination procedures apply, and the lease's own wording on these is critical.

What rights do retail tenants have to exit early in Queensland?

Retail tenants have one additional statutory right not available to tenants in standard commercial leases. Under the Retail Shop Leases Act, a retail tenant may terminate the lease within six months of entering into it where the landlord failed to meet the Act's disclosure obligations, according to the Queensland Small Business Commissioner. Compensation in that case is decided through the dispute resolution process, starting at mediation through the Queensland Small Business Commissioner.

The disclosure obligation is a specific one. Under the Retail Shop Leases Act, the lessor must give the tenant a disclosure statement at least seven days before the lease is entered into. Where that does not happen, or where the disclosure is materially deficient, the six-month window to terminate opens.

Retail tenants also have access to the Queensland Small Business Commissioner for mediation on lease disputes, and QCAT can arbitrate retail shop lease disputes, according to Business Queensland. That gives retail tenants a faster and lower-cost pathway to resolve a dispute than going straight to court.

How does a commercial lease assignment work in Queensland?

Assignment is often the most practical pathway for a tenant who wants to exit a lease early, because it keeps the landlord whole and avoids the expense of a contested surrender or termination. The Queensland Small Business Commissioner's guidance on the Property Law Act 2023 sets out how it works for all commercial leases.

• › Find a replacement tenant: the outgoing tenant finds a person willing to take over the lease.
• › Give the landlord all necessary details: the landlord then has one month to respond. The clock starts when the landlord has everything it needs to make a decision.
• › Consent is not to be unreasonably withheld: if the landlord refuses without good reason, or does not respond in time, the tenant can apply to the court.
• › Retail leases carry extra steps: under the Retail Shop Leases Act, the outgoing tenant gives the incoming tenant a disclosure statement and a copy of the current lease at least seven days before the incoming tenant agrees to buy the business or before the landlord is asked to consent, whichever is earlier.
• › Costs: a retail lease may require the tenant to pay costs reasonably incurred by the landlord in considering the assignment, according to the Queensland Small Business Commissioner.
• › Release after a further assignment: once the incoming tenant makes a further assignment, the original outgoing tenant and its guarantors are generally released from ongoing liability.

How does the process of exiting a commercial lease generally work?

Step 1: Talk to us

Get in touch and we'll explain which pathway suits the circumstances and what the lease's own terms allow.

Step 2: Review the lease and identify the options

We review the lease, the circumstances and what the Property Law Act 2023 or the Retail Shop Leases Act provides. The lease's own wording on breach, assignment, consent and make good obligations shapes every decision that follows.

Step 3: Negotiate and document the exit

We engage with the landlord's solicitor or the landlord directly, whether that is to negotiate the terms of a surrender, prepare the assignment documents, or put the landlord on notice of a breach. Every exit agreement is documented in writing.

Step 4: Manage make good and the bond

We advise on the make good obligations that apply at the end of the lease and on the position of any bond or bank guarantee, including what the Queensland Small Business Commissioner's guidance says about the standard terms under the Property Law Act 2023.

Get in touch Need help with a commercial lease exit? We're an experienced team who keep you well informed at every stage of the process. Get in touch to discuss your needs. Make an Appointment Call (07) 3437 8555

What common mistakes do tenants make when trying to exit a commercial lease?

The most common mistake is treating an informal arrangement as a legally binding exit. A verbal agreement with a landlord that the tenant can leave early, or a handshake deal to find a replacement tenant, is not binding on either party under Queensland law. The Queensland Small Business Commissioner's guidance on the Property Law Act 2023 is clear that exits must be documented in writing to be enforceable.

The second mistake is abandoning the premises without following the correct process. Where a tenant simply vacates and stops paying rent, the landlord can still pursue the tenant for outstanding rent, outgoings and any loss on a re-letting, all the way to the original lease end date. Vacating is not the same as terminating, and a tenant who walks away without a formal exit agreement remains exposed.

The third is failing to account for make good obligations. A lease's make good clause sets out what condition the premises must be returned in at the end of the tenancy. Under the Property Law Act 2023, the standard term is to return the premises in the same or better condition as at the start, excluding reasonable wear and tear, according to the Queensland Small Business Commissioner. Disputes about make good are common, particularly where the original condition report is incomplete or disputed.

When does exiting a commercial lease early not apply to you?

Not every situation that feels like an early exit actually is one. Where a lease has expired and is continuing on a periodic basis, it is not an early exit to bring it to an end. Under the Property Law Act 2023, a periodic tenancy ends on one full period's notice, according to the Queensland Small Business Commissioner. A tenancy at will requires twenty business days' written notice. Neither situation involves the early termination regime that applies to a fixed-term lease.

Similarly, where an option to renew has not been exercised and the fixed term has simply run its course, there is no exit to manage. The Queensland Small Business Commissioner notes that a landlord is not obliged to offer a new lease at the end of a term where there is no option, and a new lease is a fresh negotiation. Where no option exists, the end of the term is simply the end of the lease.

Finally, where the landlord has given a valid end-of-term notice under the Retail Shop Leases Act, the process is different again. The Act requires a landlord to give at least six months' written notice before the end of the term where no option to renew is being offered, or one month where the term is less than six months. That is not an early exit on either side; it is the Act's ordinary end-of-term process.

Frequently Asked Questions

Your Next Steps

Exiting a commercial lease early in Queensland is rarely straightforward, and the stakes are high for both tenants and landlords. Whether the route is negotiated surrender, assignment or termination for breach, the outcome depends on the lease, the other party's position and how the process is managed. Clients in Springfield and Ipswich who get advice early are in a better position to negotiate from a point of strength rather than scrambling after a decision has already been made.

If you're working through a commercial lease exit, the right advice early makes the process simpler. Contact the Brookwater Legal team or call (07) 3437 8555 to talk through where you stand.

By the Brookwater Legal Team Brookwater Legal is owned and run by Jade Kickbusch who has worked in the legal industry since 2009 and was admitted as a solicitor of the Supreme Court of Queensland in 2023, holding a Bachelor of Laws from the University of Southern Queensland. Jade leads the firm's conveyancing and property division and its wills and estates division, and oversees a team acting for clients across Greater Springfield and Ipswich in property, family law, estates and business matters. Meet the team → Make an Appointment →

Brookwater Legal · This article contains general information only and does not constitute legal advice. It does not take into account your individual circumstances. You should obtain legal advice about your own situation before acting on anything in this article. Liability limited by a scheme approved under Professional Standards Legislation.