Should you object to your tenant running a business?
I was a bit surprised by an announcement recently from Housing Minister Grant Shapps recently on the Communities and Local Government website. This urges social landlords to consider allowing social tenants to run businesses from their homes.
I have always taken the view that, certainly with reference to private rented property, it is not a good idea to agree to this.
If the use of a property changes to being primarily commercial use, my understanding is that it may then come under the business premises legislation rather than the Housing Act 1988. This could affect the right of the landlord to recover possession. Not something that most landlords would want, I am sure.
The point being that if you have agreed to the property being used for business use, you may not be able to prevent that use escalating to the level where the Housing Act will no longer apply.
Or can you?
Would it be possible to draft a clause which limits the commercial use to a specified level and provides that the property must always be used primarily for residential use? How effective would this be if the tenant disregarded it and escalated his commercial use, perhaps even moving out? Would the landlord be able to prevent the property coming under the business premises legislation?
What do other lawyers think?