Permitted use: the clause that decides what you can do in the space
The permitted use clause states what the premises may be used for, and using them for anything else is a breach of the lease. Wording that is too narrow can stop you adding a new service line, sharing space with a related company, subletting a spare floor, or assigning the lease when you sell the business. It also has to line up with the planning permit that applies to the building.
- Sets
- What business activity is allowed in the premises.
- Breach risk
- Operating outside it is a default under the lease.
- Must match
- The building's planning permit and zoning.
- Affects
- Subletting, assignment and business sale.
- Negotiate for
- Broad wording, e.g. "office and associated purposes".
What the clause actually does
It defines the activity you are permitted to carry on. "Office" is broad. "Office for the purposes of a financial planning practice" is not — it arguably prevents you from running a training business, subletting a floor to a design studio, or operating a small retail counter in the foyer.
Landlords draft narrowly for legitimate reasons: they need to manage the tenancy mix, protect exclusivity granted to other tenants, and ensure the building's permits and insurance cover what happens inside it.
Planning permits and zoning
A lease cannot authorise a use the planning scheme prohibits. If your intended use needs a permit the building does not hold, obtaining one is a real process with a real timeframe and no guaranteed outcome.
Where the use is anything other than plain office, make the lease conditional on the relevant permit being in place, and confirm who bears the cost and the risk if it is refused. Discovering the problem after you have signed and fitted out is an expensive way to learn it.
Why it matters when you grow or exit
Two moments expose a narrow permitted use. The first is subletting: if you take more space than you need with a plan to sublet the surplus, a narrow use clause limits who you can sublet to. The second is selling the business — an incoming buyer needs the lease assigned, and if their operations sit outside the permitted use, you are back at the landlord's discretion at the worst possible moment.
Changing the use later
Most leases allow a change of use with the landlord's consent, often "not to be unreasonably withheld". That qualification is worth insisting on, because without it consent can be refused for any reason at all. Expect any change to be conditional on planning compliance, and on the landlord's costs being met.
What to negotiate
Ask for the broadest wording the landlord will accept — "office and associated purposes" rather than a description of your current business. Add an express right to share occupation with related entities. Where you might sublet, say so now. And ensure any change-of-use consent is qualified as not to be unreasonably withheld or delayed.
Common questions
What is a permitted use clause?
Why does narrow permitted use wording matter?
Can I change the permitted use during the lease?
Does the lease override the planning permit?
What wording should I ask for?
General information only. This guide explains how office leasing usually works in Australia. It is not legal, financial or tax advice, it does not take account of your circumstances, and lease terms and legislation change. Get advice on your own lease before you sign it.
Rather have someone read the market for you?
Tell our concierge your brief once — size, suburbs, budget — and get a shortlist of best-fit offices with live pricing within 24 hours. Free for tenants, always.