In an age of automation, it’s tempting to rely on AI to generate legal documents—including leasing contracts. But at Ensure Legal, we’ve trialled this technology ourselves and reached a clear conclusion: AI is not suitable for drafting leases or giving legal guidance in Queensland’s fast-changing property law environment.
Here’s why.
1. We’ve Tried AI—And Found Its Limits in Queensland Law
At Ensure Legal, we actively explore legal tech to improve efficiency. We’ve tested AI drafting tools for internal workflows—but quickly realised that AI struggles to keep up with Queensland’s rapidly evolving property laws.
Take the Seller Disclosure Scheme under the Property Law Act 2023, which came into force on 1 August 2025. Some AI tools continued to reference outdated disclosure requirements weeks after the reforms. If those templates had been used in practice, they could have resulted in non-compliant contracts and exposure to penalties or unenforceability.
That’s why we maintain a lawyer-first, tech-assisted approach—AI can support the process, but never lead it.
2. AI “Hallucinations” Can Create Fake Legal Content
AI models like ChatGPT can generate persuasive but completely false statements, known as “hallucinations.”
🔍 Real Example: Mata v Avianca (USA)
A lawyer used ChatGPT to write a brief and unknowingly included fake case citations. The judge discovered the deception, and the lawyer was sanctioned (LPLC, Reuters).
A similar error in a lease—such as citing the wrong law or omitting critical protections—could be just as damaging.
3. No Accountability or Legal Protection
AI is not a legal practitioner. It doesn’t owe you a duty of care, hold a practising certificate, or carry professional indemnity insurance.
If an AI-generated lease causes harm—say, a rent escalation clause triggers a costly dispute—there is no legal liability for the tool’s creator or provider. You’re on your own.
With Ensure Legal, your lease is prepared or reviewed by a qualified property lawyer, backed by ethical obligations and insurance coverage.
4. Misaligned with Queensland Laws
AI tools are often trained on global or generic legal templates, not local statutes like:
- Retail Shop Leases Act 1994 (Qld)
- Property Law Act 2023 (Qld)
- Land Title Act 1994 (Qld)
Without precise legal tailoring, AI-drafted leases may:
- Omit critical disclosures
- Misapply rent review mechanisms
- Misstate termination rights
What seems “standard” in NSW or the U.S. might be invalid or unenforceable in Queensland.
5. Subtle Legal Errors = Major Consequences
AI-generated leases often miss or misplace:
- Make-good clauses
- Default provisions
- Indemnities and insurance obligations
- Landlord vs tenant repair duties
These are high-risk clauses, where even a few misplaced words can result in costly disputes—or give one party undue advantage.
6. Lack of Legal Strategy and Commercial Judgment
Only a human lawyer can ask:
- What are your goals as a landlord or tenant?
- Do you want to limit your exposure or maximise your control?
- How should the lease align with your commercial plans?
AI can’t negotiate, advise, or align legal terms with your strategic interests. It just fills in templates.
7. Confidentiality and Insurance Concerns
Using free or public AI tools may involve uploading sensitive data to third-party servers, raising serious:
- Privacy risks (under the Privacy Act 1988 (Cth))
- Confidentiality breaches
- Exposure to cyber threats
Also, some professional indemnity insurers may not cover losses caused by AI-generated advice or errors.
Real-World Examples of AI Legal Failures
| Case | Failure |
|---|---|
| Mata v Avianca (2023, USA) | Lawyer submitted fake case law generated by AI. Court imposed sanctions. |
| AI-drafted leases in UK | Unenforceable “break clauses” led to tenant litigation. |
| European Law Firm breach | Uploaded lease info to public AI tool—violated GDPR, lost major client. |
When Is It Okay to Use AI in Property Law?
We’re not anti-tech. At Ensure Legal, we responsibly use AI tools to:
- Draft internal checklists
- Summarise long documents
- Identify basic clause structures
But AI never replaces legal review. Every contract, especially a lease, must be reviewed or drafted by a lawyer who:
- Knows Queensland property law
- Understands your commercial context
- Can tailor each clause to your needs
Conclusion: A Cautionary Note for Landlords and Tenants
AI has promise—but when it comes to legally binding documents like leases, shortcuts can become liabilities.
Ensure Legal combines expert legal advice with smart tools, ensuring you stay compliant, protected, and commercially sound. Don’t risk your lease on a robot.
📞 Need help drafting or reviewing a lease?
Get in touch with Ensure Legal’s leasing specialists today.
