Commercial use of space in a residential property

Question from Sue updated on 4th October 2006:

Hi A two part question if I may. A business wants to rent storage space from a tenant who is under a residential aggreement. What documentation and legal agreement is required to cover everyone's interests? Should the agreement be with the tenant and the leasees or with us (the owners) and the business? Regards Sue

Our expert Jeff Montgomery responded:

For owners to lease the storage space to the business, the tenancy agreement between the landlords (owners) and the tenants could be varied to reflect the exclusion of the storage space from the residential premises covered by the tenancy agreement. Any variations to a tenancy agreement can only be done with the consent of both the tenants and the landlord. Other conditions of the tenancy agreement, such as amount of rent, could also be varied at this time to reflect the change in premises. In terms of arrangements with the business, as the business would not be renting the space for residential purposes, a commercial leasing arrangement would need to be entered into. This falls outside of the Residential Tenancies Act 1986, which applies only to tenancies for residential purposes. I suggest you contact a property lawyer or your local community law centre for legal advice on entering into a commercial lease.

The Department of Building and Housing provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.


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