Anyone who has drafted or reviewed a commercial lease is
familiar with a "permitted use" clause. A permitted use
clause is intended to define and limit the type of business that a
tenant is entitled to operate from a particular premises. Whether
to protect the tenant mix in a shopping centre or ensure compliance
with the exclusive rights of other tenants, landlords put
significant effort into negotiating appropriate use clauses with
their tenants. The case of JCP Drugs Ltd. v. Daniels
Leslieville Corp., [2019] O.J. No. 4886 is an example of why
it is so important to pay close attention to permitted use clauses
in commercial leases.
The Permitted Use
In JCP Drugs, the landlord was the owner of a new
high-end mixed-use condominium development. It entered into an
agreement to lease with a tenant for the operation of a
"pharmacy and family medical clinic" for premises located
on the ground floor of the development. The agreement contained
standard language requiring
