User covenants in commercial leases and how to enforce them

Improper Use of Commercial Premises


Use of commercial premises

All leases have a use clause (or user clause) specifying how the premises are to be used. Often the clause will also specify ways in which the premises may not be used, e.g. for illegal or immoral purposes or in such a way as to cause a nuisance to the owners and occupiers of nearby premises.

Consequences of improper use

Landlords should monitor their properties to ensure that the premises are being used as intended. Improper use of premises may have the following consequences:

• It may be in breach of planning laws, leading to enforcement action by the local planning authority.

• It may be in breach of a covenant affecting the freehold, leading to legal action by the person or persons with the benefit of the covenant (possibly a neighbouring owner).

• The unauthorised use may compete with the (authorised) use of a neighbouring tenant of the same landlord. That tenant is likely to be unhappy and if the landlord has given a covenant not to allow a similar business to trade nearby the landlord may be in breach of that covenant.

• The unauthorised use may constitute a nuisance, i.e. it interferes with the use or enjoyment of neighbouring property. Those affected by the nuisance may go to court to seek an injunction preventing the unauthorised activity from continuing.

In many of the above cases the tenant, rather than the landlord, will be the primary target of any legal action. However, the landlord will inevitably become involved and this will be costly in terms of time and expenditure. It will also put a strain on the landlord’s relations with the affected parties.

Active management by the landlord

Landlords or their agents should make sure that the property is inspected at regular intervals to verify that the premises are being used in accordance with the relevant lease covenants. Any concerns should be raised with the tenant at the earliest opportunity. This can be done informally but it may be prudent to follow up with a letter so there is a written record of the landlord’s intervention.

Depending on the nature of the breach, it may be appropriate to give the tenant some time to rectify the issue. For example, if squatters have moved into an empty property or part of a property the tenant should be given time to arrange for them to be evicted. The landlord should monitor the situation carefully.

If the tenant shows no signs of dealing with the issue, or if third parties (such as neighbours, the local planning authority or the police) have complained to the landlord, the landlord may need to deal with the matter more formally in one of the ways set out below.

Landlord’s response to breach of user clause


If informal resolution of the problem has not been possible, the landlord should take specialist legal advice. Depending on the circumstances, the following steps may need to be taken:

• Obtaining an injunction requiring the tenant to cease the unauthorised use.

• Seeking damages from the tenant for losses arising out of the improper use.

• Responding to legal action brought by neighbours or the local planning authority

• Forfeiture of the lease.

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