Legalising the use of rented premises

"Tenant must keep the owner responsible to sign any necessary application for any future change or alteration in the use of the premises"

The parties to a rental agreement normally agree as to the use of the demised premises and include a term providing an obligation upon the owner to sign any necessary application for obtaining the relevant permit, if there isn’t any for the particular use of the property. There is an issue for the tenant to be careful before signing the tenancy agreement, to ask the owner to provide him with the relevant permit regarding the use of the premises. Furthermore, he must care to keep the owner responsible to sign any necessary application for any future change or alteration in the use or the appearance of the premises, particularly when the property is a shop.

The lack of such provision in the tenancy agreement will leave the tenant without remedy in the event the owner refuses to facilitate him. The existence of the provision binds the owner and gives the right to the tenant to demand from the owner to sign the relevant application in the event he refuses or omits to co-operate. The Court has the discretionary power to issue an order against the owner to sign the relevant application or documents needed for legalising the use or any alteration which will improve the status of the property.

Judgment of the Rent Control Court

Such a legal issue was dealt with by the Rent Control Court in a judgement whereby the owner refused to sign the relevant application for the tenant to obtain a permit for changing the use of a shop. Originally, the shop was rented as a warehouse and the tenant converted it to a retail shop, by making improvements and reasonable alterations therein. The tenant proceeded with the necessary changes and alterations following the agreement with the owner that was reached before the Court previously. Due to the refusal of the owner, the tenant faced criminal proceedings instituted by the relevant Authority, including contempt of an order of the Court.

In view of the aforesaid problems, the tenant applied to the Court requesting the issue of an order directing the owner to sign the relevant application and documents necessary for the issue of the relevant permits. He succeeded his claim, even after making the alterations and changing the use of the shop. The Court observed that the changes and alterations were reasonable and necessary and had to resolve the dispute once and for all by issuing the order against the owner.

It is remarkable that the dispute lasted for many years, with the owner trying to evict the tenant from the premises and the latter defending his possession of the shop. The making of the agreement before the Court, giving the tenant the right to use the shop for retail purposes, enabled him to successfully enforce the owner to comply with his contractual obligations. One of the arguments of the owner was that the original tenant left the premises and gave the possession of the shop to a company of the same group.

Ruling of the Court

The Court decided that the creation of the group of companies didn’t alter the legal status of the tenancy and the existence of the group in the shop has been accepted by the owner. The original tenant, who eventually became statutory tenant, had always kept legal possession of the shop, irrespective of the use of the shop by other companies of the same group. The same business people were using the shop, nothing changed and thus the argument of the owner failed.

Conclusion

It is evident from the above that nowadays, even for a tenancy, the parties must regulate precisely their rights in writing, particularly a tenant must care to protect his rights from the outset, rather than later. Additionally, he is advised to exercise his rights as early as possible, in order to avoid unnecessary difficulties or objections by the owner.