Tucked away in nearly every lease agreement is a seemingly simple clause titled “Use of Premises.” While it may appear to be standard boilerplate language, this section is one of the most important in defining the boundaries of the tenancy and can have significant legal implications for both residential and commercial tenants. This clause explicitly states how the rented property is to be used and, just as importantly, how it is not to be used. Its purpose is to protect the landlord’s property, ensure compliance with local laws, and maintain the character of the building.

In a residential lease, the use clause is typically straightforward. It will state that the property is to be used “for residential purposes only.” This simple phrase carries a great deal of weight. It means the tenant is authorized to use the unit as their private home and for activities normally associated with a home. It also means they are prohibited from using the property for commercial, industrial, or illegal activities. A tenant who begins operating a high-traffic business, such as a retail shop or a client-facing consultancy, from their apartment would be in direct violation of this clause. This protects the landlord from increased liability and preserves the quiet enjoyment of other residents in the building.