When drafting a lease, it is important to that it set out how a tenant is permitted to use the premises. While the permitted use is often no more than a few words, it is the balancing legal term between both the landlord and tenant’s interests.
How a property solicitor will advise you, depends on your status in the lease and any future plans for the premises. Landlords, need to consider if they wish to apply certain use restrictions to maintain both a greater control over the specifically leased premises and the tenant mix in the overall building. Tenants, however, often prefer a broader definition which allows for greater freedom. Tenants should also consider the future of their business or ability to transfer the lease, long before signing any contract.
A recent example is a matter where a tenant operating a clothes shop wished to transfer the lease to an adult bookstore operator. The lease stated the tenant could use the premises for “any legal use of the premise”, however, the landlord was objecting to the transfer for a number of reasons including moral grounds. Cases like these, clearly demonstrate the importance of creating clear terms and conditions for the tenant’s use of the premises.
Consider the following aspects when attempting to determine what the permitted use scope should contain.
Not an exhaustive list, landlords and tenants should carefully consider all the potential restrictions of a permitted use clause when negotiating a lease. For any queries on leases consult the leading property lawyers in Melbourne at P&B Law today.