Permitted Use & Restrictions
Also called: Use Restrictions · Permitted Purpose Clause
A permitted use clause restricts what a property can actually be used for — residential, commercial, a specific type of business — and prohibits uses outside that scope. It protects the landlord's interest in the property and, in commercial settings, can protect other tenants from incompatible neighbouring uses.
In more detail
For commercial leases, permitted use is often tied to zoning and licensing — a space zoned for retail may not lawfully be used for food service without additional permits, regardless of what the lease itself allows.
In shared commercial buildings (malls, business parks), use restrictions also protect other tenants — a landlord may promise exclusivity for a certain type of business within the property, which only works if every lease consistently restricts competing uses.
A restriction drawn too narrowly can prevent a tenant from adapting their business over time; one drawn too broadly can expose the landlord to uses they never intended to permit. The right scope depends on the specific property and relationship.
A retail lease permits use "solely for the sale of clothing and accessories." The tenant cannot later convert the space into a restaurant without the landlord's consent and likely a lease amendment — even if the change would otherwise be a lawful business.
Zoning law and permitted commercial uses are set by local government and vary significantly by municipality — a use permitted under the lease can still be unlawful if it conflicts with local zoning.
What our lawyers check
- Whether the permitted use is defined precisely enough to be enforceable
- Alignment between the permitted use and actual zoning/licensing requirements
- Whether any exclusivity is promised, and whether it's consistently enforced across the property
- What happens if the tenant's business needs change during the lease term
Contracts where this clause matters
Related terms
This definition is general information about commercial contracting practice, not legal advice. How a clause operates depends on the specific wording of your agreement and the law that governs it. For advice on your contract, have it reviewed by a lawyer.
All glossary terms