In this episode of Wealth Coffee Chats, Cat Schultz from the Positive Property Management group dives into the critical legislation changes that hit Queensland in late 2024 and how they are affecting landlords in 2026. If you own an investment property in the Sunshine State, the rules around “Break Leases” have shifted significantly, moving away from a pro-landlord cost recovery model to a structured penalty system.

Cat breaks down the “percentage-based” penalty system and explains why your property manager’s speed and strategy are now more important than ever. If you aren’t careful, a tenant breaking a lease in the final months of their agreement could leave you out of pocket for marketing and vacancy costs that you used to be able to pass on.

What We Covered:

• The 2024 Legislation Shift: Why any lease signed after September 30, 2024, follows a completely different set of rules for re-letting costs.

• The “Lesser of Two” Rule: How the law now dictates that tenants pay either a fixed percentage of the lease or the rent until a new tenant is found—whichever is cheaper for the tenant.

• Breaking Down the Penalty Tiers:

• First 25% of lease: Maximum 4 weeks’ rent penalty.

• 25% to 50% of lease: Maximum 3 weeks’ rent penalty.

• 50% to 75% of lease: Maximum 2 weeks’ rent penalty.

• Final 25% of lease: Maximum 1 week’s rent penalty.

• The Cost of “Void” Terms: Why you (or your agent) cannot simply “contract out” of these laws with special terms in your lease agreement.

• Strategic Leasing: Why a 14-day re-letting plan is the only way to protect your cash flow under these new caps.

3 Key Takeaways

1. The Penalty Cap is a Hard Ceiling: In the past, tenants paid rent until a new tenant was found. Now, if a tenant breaks a lease in the 10th month of a year-long agreement, the most they will ever owe you is one week’s rent—even if it takes your agent four weeks to find a replacement. You must wear the difference.

2. Know Your Tenant’s Roadmap: Building a relationship with tenants is now a financial strategy. By understanding if a tenant is planning to buy a home or relocate for work, you can prepare for a transition early and avoid being blindsided by a low-penalty break-lease window.

3. Efficiency is Your Only Buffer: Since you can no longer pass on unlimited re-letting costs, your agent’s ability to list a property the same day notice is given is vital. In a fast market like SE Queensland, if your property is sitting vacant for 4+ weeks, the legislative caps will turn that vacancy into a direct hit to your bottom line.