Understanding Permitted Use in Commercial Leases
In commercial leasing, the permitted use clause plays a crucial role in defining what activities can take place on the leased property. This clause outlines the business activities allowed and sets clear boundaries for tenants during the lease term, specifying what the tenant can and cannot do.
A Commercial Lease Agreement details the rules and regulations governing a tenant’s use of the property. For example, the lease may set restrictions around subletting the property or outline whether certain types of businesses, such as a restaurant or retail store, can operate on the premises. In short, the permitted use clause governs the type of business activities allowed on the property.
What if you want to change the Permitted Use?
If a tenant wishes to use the premises for a purpose beyond what the lease allows, they must first obtain written consent from the landlord. Depending on the nature of the change, tenants may also need to seek approval from local authorities or the local government/council.
This process ensures that any new business activity aligns with zoning laws and other regulations, helping avoid potential legal issues or conflicts down the road.
When negotiating or drafting a Commercial Lease Agreement, it’s vital to ensure the permitted use is as specific as possible. A clear and detailed permitted use clause not only helps avoid confusion but also provides flexibility for future changes, ensuring the property can meet evolving business needs.
How Key + Stone Property can help
Key + Stone Property are experts in determining accurate permitted uses for properties, ensuring compliance and suitability for the specific needs of our clients. Our team of experts can ensure that your lease agreement protects your interests and supports the long-term success of your business.
If you have any questions or need guidance on the permitted use of a commercial property, Key + Stone Property are ready to provide the insights and assistance you need to make informed decisions about your lease agreement. Contact us today to discuss your needs.
Readers should seek independent legal advice tailored to their specific circumstances. Key and Stone Property Pty Ltd do not accept any liability for the accuracy or applicability of the information provided herein.