In a commercial lease, the use of premises clause is far more specific and is often a point of intense negotiation. It will narrowly define the exact type of business the tenant is permitted to operate. For example, a lease for a retail space in a shopping mall might state that the premises can be used “only for the operation of a high-end coffee shop and for no other purpose.” This is critical for the landlord, who is trying to create a balanced and complementary mix of tenants in the shopping center. They do not want to lease a space to a coffee shop only to have the tenant later decide to turn it into a discount shoe store, which could violate the landlord’s agreements with other tenants.

For the commercial tenant, this clause can be a double-edged sword. While it provides clarity, a use clause that is too narrow can restrict the business’s ability to adapt and evolve. A smart business tenant will try to negotiate a slightly broader use clause, for instance, “for the operation of a cafe selling coffee, pastries, and related light food items.” This provides the flexibility to add new product lines in the future. Violating the use of premises clause is a material breach of the lease and can be grounds for eviction, making it a section that both parties must take very seriously.