Notice of Re-Entry for Commercial Leases in New Zealand

If you run a small business, your premises often aren’t just “a place to work” - they’re a major cost, a key part of your brand, and sometimes the reason customers can find you at all.

So if you’ve received (or you’re worried you might receive) a notice of re-entry in relation to your commercial lease from your landlord, it can feel like the ground is shifting under you.

The good news is that a notice like this doesn’t always mean your business is immediately locked out. In New Zealand, landlords usually need to follow a proper legal and contractual process before they can bring a commercial lease to an end for breach - and tenants often have options to fix the problem or negotiate a workable outcome.

Below, we’ll break down what a notice of re-entry is, when it can be used, what landlords generally need to do before terminating, and what you should do straight away to protect your business.

What Is A Notice Of Re-Entry In A Commercial Lease?

A notice of re-entry (sometimes described as a notice of intention to re-enter) is a formal notice a landlord gives when they believe you’ve breached your commercial lease and they want to enforce a right to:

end the lease (often referred to as “forfeiture”); and/or
re-enter the premises (i.e. take back possession).

In many commercial leases, the landlord’s right to terminate for breach is written into the lease as a re-entry clause. This clause is common in New Zealand commercial leases, including leases based on standard forms.

When people search for “notice of re-entry” in a commercial lease context, they’re usually trying to understand one of two situations:

You’ve received a notice and need to respond quickly; or
You’re in a dispute with your landlord (rent arrears, alleged damage, “outgoings”, unauthorised assignment/subletting, etc.) and you want to know how serious it could get.

In New Zealand, landlords can’t just terminate “because they feel like it” - but they can terminate if the lease allows it and the legal requirements are met.

When Can A Landlord Issue A Notice Of Re-Entry?

A landlord typically issues a notice of re-entry for a commercial lease when they believe you’ve committed a breach serious enough to trigger their termination/re-entry rights under the lease.

Common triggers include:

1) Non-Payment Of Rent

This is the most common. Even short periods of rent arrears can trigger default action under many lease forms, especially if the lease says time is “of the essence” for rent payments.

Rent disputes can get messy quickly, particularly where there are disagreements about:

what counts as “rent” (base rent vs outgoings vs GST),
interest on overdue amounts,
rent reviews and how increases are calculated, and
whether any rent relief or reduction applies (for example, during disruptions or access issues).

If you’re in a situation where rent should be reduced due to loss of access or reduced premises use, a properly drafted Rent Abatement Agreement can be a practical way to document the deal and avoid misunderstandings that later become “arrears”.

2) Breach Of Other Lease Terms

Landlords can also take action for non-rent breaches, such as:

using the premises for an unauthorised purpose (breaching the “permitted use” clause),
failing to repair or maintain the premises as required,
making unauthorised alterations or signage changes,
breaching health and safety obligations (where your lease pushes responsibilities onto the tenant),
causing nuisance or disturbing other tenants, or
subletting/assigning without consent.

Important note: not every breach will justify termination in practice. The lease wording, the seriousness of the breach, and whether the breach can be remedied all matter.

3) Insolvency Or “Business Failure” Events

Some commercial leases include default triggers if your business becomes insolvent, goes into liquidation, or has a receiver appointed. These clauses can be highly technical and should be reviewed carefully.

If you’re dealing with financial stress, it’s worth getting advice early, before a notice of re-entry arrives - once termination is on the table, your options may narrow.

How Does The Re-Entry And Termination Process Work In NZ?

In New Zealand, forfeiture/re-entry in commercial leasing is closely tied to the Property Law Act 2007 (as well as what your lease says).

In plain terms, a landlord can only forfeit (end) a lease for breach if (1) the lease gives them a right of re-entry/forfeiture for that breach, and (2) they go about enforcing that right in the way the law and the lease require. Often, that involves giving notice and time to remedy - but the rules can differ depending on whether the breach is non-payment of rent or something else.

In particular:

For many non-rent breaches (for example, unauthorised alterations or failure to maintain), landlords generally need to give a formal notice that complies with the Property Law Act 2007 requirements (including telling the tenant what the breach is and allowing a reasonable time to remedy, where it’s capable of remedy) before they can forfeit.
For rent arrears, the legal position can be different, and depending on the lease wording and the circumstances, a landlord may not be required to give the same type of statutory notice before enforcing a right of re-entry - which is why rent arrears situations can escalate quickly.

However, the exact rules and timeframes depend on:

the type of breach (rent vs non-rent),
the lease drafting (default clauses, notice clauses, service methods), and
how the landlord is seeking to enforce (for example, “peaceable re-entry” vs court proceedings).

Step 1: Check The Lease For The Re-Entry Clause And Notice Requirements

Your first practical step is always the same: read the lease and identify the default provisions. This is where a tailored Commercial Lease Review can pay for itself - small wording differences can change what the landlord must do and what you can do in response.

Most commercial leases require notices to be served in a particular way (for example, to a registered address, by email, or to your lawyer). If the notice hasn’t been served correctly, that may affect whether the landlord can rely on it.

Step 2: Landlord Serves A Formal Default Notice / Notice Of Re-Entry

A notice of re-entry (or a default notice warning of re-entry) usually tells you:

what the landlord says you’ve done wrong (the breach),
what you must do to fix it (if it’s capable of remedy),
how long you have to fix it, and
that the landlord intends to terminate and/or re-enter if you don’t comply.

If the notice is vague (“you are in breach of the lease”) without details, that can be a red flag. A tenant can’t properly remedy a breach if they don’t know exactly what the landlord alleges.

Step 3: Opportunity To Remedy (Where Possible)

Many breaches are “remediable” - meaning you can fix them. For example:

paying rent arrears,
repairing damage,
removing unauthorised signage, or
stopping unauthorised use.

If the breach can be remedied and you remedy it within the required timeframe (including any timeframe required by the lease or by statute for the type of breach), the landlord may lose the ability to terminate based on that breach (though they may still pursue costs or other remedies depending on the lease).

Step 4: Termination / Re-Entry If Not Remedied

If you don’t remedy (or can’t remedy) the breach, the landlord may attempt to cancel the lease and re-enter.

Re-entry is a serious step with major business impacts, including:

loss of premises and fit-out investment,
business interruption (including staff and customer impacts),
possible disputes over stock and equipment left onsite, and
claims for arrears, damages, and legal costs.

This is why it’s crucial to treat any notice of re-entry relating to a commercial lease as urgent - even if you think the landlord is being unreasonable.

What Should Tenants Do Immediately After Receiving A Notice Of Re-Entry?

If you receive a notice of re-entry, your goal is to (1) avoid losing your premises, (2) reduce financial damage, and (3) protect your position if the dispute escalates.

Here’s a practical response checklist.

1) Don’t Ignore It (Even If You Disagree)

It’s normal to feel frustrated, especially if you think the landlord has contributed to the problem (for example, maintenance issues, access restrictions, or disputes over outgoings).

But silence is risky. If the deadline passes, the landlord may argue you had notice and chose not to act.

2) Identify The Alleged Breach And The Deadline

Read the notice carefully and pull out:

the exact clause(s) they say you breached,
the remedy demanded, and
the date/time you must comply by.

If the notice refers to the wrong clause, wrong entity name, or incorrect amounts, that can matter - but you still need to respond proactively.

3) Gather Your Paper Trail

Start building a file immediately. Save:

the lease and any variations,
rent invoices/statements and proof of payments,
emails/text messages about repairs, disputes, or agreements,
photos/videos of the premises (especially if condition is disputed), and
any previous default notices or warnings.

If this becomes a formal dispute, a well-organised timeline can make a huge difference.

4) Work Out If You Can Remedy (And How Fast)

If the breach is rent arrears and you can pay, paying promptly is often the quickest way to stabilise the situation (even if you still dispute parts of the amount - you can sometimes pay “without prejudice” and keep negotiating).

If the breach is non-rent (repairs, unauthorised use, signage, assignment issues), work out what “remedy” looks like in practice and whether you can meet the timeframe.

5) Get Legal Advice Before You Send A “Big” Response

Your first reply matters. Tenants sometimes accidentally admit breaches, waive rights, or escalate conflict in writing.

If you’re unsure, it’s worth speaking to a lawyer who deals with commercial leasing and can review both the notice and the underlying Commercial Lease Agreement.

Where a relationship reset is still possible, having a lawyer help you frame a clear, solution-focused response can also keep things from turning into a full-blown dispute.

6) Consider Negotiating A Practical Outcome

Even where there’s a technical breach, commercial lease disputes often settle through practical arrangements, like:

a repayment plan for arrears,
temporary rent relief / rent abatement arrangements,
a written variation confirming what needs to be fixed and by when, or
an agreed exit date (if staying isn’t realistic).

If exiting is on the table, documenting it properly matters. Depending on the situation, that could involve a Lease Surrender Agreement (ending the lease by agreement) rather than termination “for default”.

Can A Tenant Stop Termination Or Get More Time? (Relief And Other Options)

In many cases, a notice of re-entry is the beginning of a process - not the end. Tenants may have options to prevent the lease being terminated, especially where the breach can be fixed and you’re acting quickly and in good faith.

Relief Against Forfeiture (In Plain English)

New Zealand law can allow a tenant to apply for relief from forfeiture (meaning the lease is effectively “saved” even after a landlord seeks to forfeit it), usually on conditions like:

paying arrears (and sometimes interest/costs),
fixing the breach, and/or
complying with future lease obligations.

Whether relief is available depends heavily on the facts, the type of breach, timing, and your conduct. This is not something to DIY - but it’s important to know that receiving a notice of re-entry doesn’t always mean you have zero options.

Wrong Party / Wrong Process Issues

Sometimes the “breach” is more complicated than it looks. For example:

The landlord may have served notice on the wrong entity (common where businesses trade under a trading name).
The landlord may not have followed the notice and service rules in the lease (and for some breaches, may also need to meet statutory notice requirements before forfeiture).
The alleged breach might actually be the landlord’s responsibility (for example, certain structural repairs).
The landlord may have “affirmed” the lease or waived the right to forfeit for that breach by acting in a way that’s inconsistent with termination (this is very fact-specific).

These technical issues can affect enforceability, but they’re rarely a “magic wand”. Courts and decision-makers often focus on whether the tenant is genuinely trying to remedy and whether the landlord is being kept whole financially.

If You’re Assigning Or Selling The Business

Notice issues can also arise during a business sale, where you’re trying to assign the lease to a buyer. If assignment consent hasn’t been handled correctly, a landlord may claim breach.

If your plan is to transfer the lease, it’s important to document it properly with a Deed Of Assignment Of Lease and make sure landlord consent requirements are met.

How To Reduce The Risk Of A Notice Of Re-Entry In The First Place

No one starts a lease expecting conflict. But a few preventative steps can dramatically lower your risk of ending up in a re-entry situation.

1) Get The Lease Right Before You Sign

A lot of re-entry disputes happen because the tenant didn’t fully understand what they were committing to - especially around outgoings, repairs and maintenance, rent review, and default provisions.

Before you sign, having a Commercial Lease Lawyer check the lease can help you spot clauses that could become serious problems later.

2) Calendar Your Key Dates

Small businesses are busy, and missed dates are common. Put reminders in your calendar for:

rent payment dates,
rent review dates (and when notices must be given),
insurance renewal obligations, and
option/renewal dates (and notice deadlines).

3) Document Agreements In Writing

If you agree with your landlord on rent relief, repairs, or temporary changes to use of the premises, get it confirmed in writing. Verbal deals are where disputes start.

4) Act Early If You’re Under Financial Pressure

If cashflow is tight, it’s tempting to “wait and see” on rent. The problem is that arrears can become a default quickly, and once legal notices start, costs often increase.

Early negotiation (before you’re in breach) usually gives you more leverage and more options.

Key Takeaways

A notice of re-entry is a serious warning that your landlord may try to end your lease and take back possession due to an alleged breach.
Landlords usually need to follow the lease process and (for many non-rent breaches) the Property Law Act 2007 notice requirements before they can forfeit - but rent arrears situations can work differently depending on the lease and circumstances.
Common triggers include non-payment of rent, unauthorised use, failure to repair/maintain, and unauthorised assignment or subletting.
If you receive a notice, treat it as urgent: identify the breach, note the deadline, gather your documents, and work out whether (and how) you can remedy.
Tenants may have options to avoid termination - including remedying the breach, negotiating a variation, or seeking legal help around relief and process issues.
The best protection is preventative: get the lease reviewed before signing, document any rent relief/changes in writing, and deal with issues early.

If you’d like help responding to a notice of re-entry, reviewing your lease terms, or negotiating a way forward with your landlord, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.

Disclaimer: This article is general information only and does not constitute legal advice. Every lease and dispute is different - you should get advice on your specific situation.

Notice Of Re-Entry For Commercial Leases In New Zealand