A landlord may have a willing tenant and a signed lease, yet face a fundamental problem: the property cannot lawfully be used for the tenant’s intended business. Land-use due diligence should take place before occupation, alterations and financial commitments, not only when the municipality or a neighbour objects.
Hugh Raichlin Attorneys assists with commercial property agreements, lease disputes and related litigation. We help clients distinguish the property’s permitted use from the promises and risk allocation in the lease.
Write down the intended use precisely
“Business premises” can conceal substantial differences between an office, restaurant, shop, workshop or accommodation activity. Hours, customer traffic, cooking, noise, parking and structural changes may affect the permissions needed.
Obtain the relevant zoning information and any consent-use, departure or other approval relied upon. Check conditions attached to the permission, not merely the headline description. Building approval, land-use permission and a scheme’s private consent may address different requirements.
Do not treat an assurance as an approval
The source article described a coffee-shop lease dispute involving residential zoning. Its practical warning remains important: a landlord’s statement that the proposed activity will be acceptable does not itself confer municipal authority.
The legal consequences depend on the actual prohibition, the agreement and the facts. Do not jump from “a permission is missing” to “every payment obligation is automatically void”. Advice may need to consider enforceability, misrepresentation, breach, conditions, cancellation and other remedies separately.
Allocate the approval risk before signature
A carefully drafted lease should identify who must obtain each approval, who pays, what evidence must be produced and by when. It should address the consequences of refusal or delay, including occupation, rent commencement, fit-out expenditure and restoration.
A condition that simply says “subject to approvals” may leave important questions unanswered. Specify the relevant approval and the procedure for establishing whether the condition has been met. Do not assume an oral extension changes a contractual deadline or that expenditure proves consent.
Check the file before demanding payment or cancelling
- The signed lease, annexures and any variation.
- A clear description of the activity actually carried on.
- Municipal zoning information, applications, approvals and conditions.
- Advertising or representations made before the lease was signed.
- Fit-out invoices, occupation dates and payment records.
- Compliance notices, objections and correspondence about the problem.
Preserve the distinction between what each party knew, what it represented and what it promised to do. A dispute can become harder to resolve when all communications are reduced to a general accusation that the other party acted unlawfully.
Choose a response that does not worsen the position
A possible negotiated solution might involve obtaining an available approval, changing the activity, varying commencement arrangements or ending the lease on documented terms. None of these should be assumed feasible without checking the governing rules and commercial consequences.
A tenant should not simply stop paying or abandon the premises on the strength of a general online article. A landlord should not use lockouts or service disconnections as a shortcut. The appropriate notice and remedy depend on the facts, and acting inconsistently can prejudice a later claim.
Questions clients ask
Does an existing business prove that the use is permitted?
Not necessarily. Past operation may have occurred without the required permission or under conditions that do not cover the new proposal. Ask for the documents.
Can a lease make the tenant responsible for all approvals?
It can allocate responsibilities, but its effect and enforceability need assessment. A clause is not a municipal permission, nor does it automatically resolve a misleading representation or unlawful use.
Should the sale or lease wait for approval?
That is a transaction-structuring decision. Advice should address a clear condition, risk allocation and deadlines before either party commits significant money.
Put permission and contract together
Bring the property and municipal records as well as the lease. HRA can assess the relationship between the intended use, the agreement and the remedy you need, whether that involves drafting, negotiation or proceedings.
Related legal assistance
General information, not legal advice on a particular matter. The documents, facts and applicable law determine the appropriate next step.