Part 9 – Use
A lease will always contain restrictions on how the tenant can use the property. Often this is linked to the planning permission applicable to the building; indeed leases usually require the tenant to comply with planning restrictions and do not permit planning applications to be made without the landlord’s consent. Within a use class, such as A1 retail, a lease can then be more specific, either limiting the use to a particular type of shop or prohibiting certain types of shop. This is more common in shopping centres where competition between tenants is not always desired.
Over and above the type of use permitted, a lease can restrict the manner in which the property is used. For the benefit of adjoining properties, there are often restrictions on using noisy machinery, playing loud music, generating noxious fumes and the like. Restrictions on the use of outside space are commonplace to prevent the build-up of rubbish. There can also be positive obligations, such as to keep a shop window well-lit and appropriately laid out. Indeed, there can be a requirement to keep the premises open for trade at certain times. Conversely, some leases restrict the hours of opening, usually as a result of a planning restriction.
Landlords need to ensure that they are not overly restrictive as this will make it harder for them to find a tenant who will accept the lease. Tenants need to ensure that they only accept restrictions and obligations that will work with their business. Further, tenants need to consider whether they will be able to sell the lease on to another tenant and whether that new tenant would be able to operate a business easily.
In this series of articles, we are aiming to give you a brief overview of the principal areas covered by a commercial lease. These articles are for guidance only and do not represent legal advice. If you need advice or assistance on leases or any other property concern, please do not hesitate to contact Andrew Rannie, Head of the Property Department for a free initial consultation.