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ARTICLE · 29 APRIL 2014

Do you have permission? Navigating "permitted use" in a lease

When committing to a lease, a tenant usually has in mind the purpose for which the premises will be used.

AustraliaReal Estate and Construction
Focus: Defining the "permitted use" in a lease
Services: Property & Projects
Industry Focus: Property

When committing to a lease, a tenant usually has in mind the purpose for which the premises will be used. However, this does not always lead to an appropriate statement of the "permitted use" in the relevant lease.

The permitted use is often no more than a few words in a lease, but it is an important commercial term that parties need to consider in balancing their competing interests. Usually tenants prefer to have a broad definition which will allow a range of activities to be carried out, while landlords will often aim to be more prescriptive in order to maintain control over both the use of the premises and the tenancy mix within their building or centre.

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