When buying, selling or refinancing a commercial property, one aspect that is often overlooked is the permitted use of the property. This is an essential part of due diligence as it sets out how the tenant is allowed to use the premises. Overseeing this aspect can limit the tenant’s growth, prevent a future sale, or even put the tenant in breach of the lease terms.
Permitted use refers to the lawful use of a property under planning legislation. It determines what activities can legally be carried out from a property. This can be established by an existing planning permission; a lawful development certificate; or long-established lawful use.
Simply because a business has occupied premises for several years does not necessarily mean that the appropriate planning authorisation is in place.
A property’s authorised use is usually established by one or more of the following:
- A planning permission granting specific use.
- A lawful development certificate confirming existing lawful use.
- An established lawful use which has continued uninterrupted for the relevant statutory period.
The authorised planning use should not be confused with the permitted use under a lease. A lease may allow a tenant to operate a particular business, but that does not mean the planning authority has authorised that use. Both planning law and the lease must permit the intended use.
Why It Matters to Both Sides
If a property is being used without the correct planning permission, there can be serious consequences. Local authorities may have enforcement powers, which could require the unauthorised use to cease.
This matter becomes more serious where a property comprises several commercial units. Each unit may be occupied by a different tenant carrying on a different type of business. It is therefore necessary to establish the authorised use of each unit.
As a result, solicitors are often required to confirm that the current use of the property is lawful before a transaction can complete.
Use classes
Commercial properties generally fall within various planning use classes under the Town and Country Planning (Use Classes) Order 1987 (as amended). The 2020 reforms simplified many categories by introducing Class E in England, which now encompasses a wide range of commercial uses, including:
- Retail shops
- Financial and professional services
- Restaurants and cafes
- Offices
- Indoor sports and fitness facilities
- Medical and health services
- Nurseries
However, some uses remain outside of Class E.
Understanding the correct use class is essential when considering whether a property’s current use is authorised or whether planning permission may be required for a proposed change.
Why do solicitors investigate permitted use?
A commercial property solicitor will review planning documentation to establish that the property’s current use is lawful. This protects both the buyer and any lender providing finance.
If a property is being used unlawfully, there may be several consequences, including but not limited to:
- Enforcement action by the local planning authority.
- Restrictions on future occupation or trading.
- Reduced property value.
- Difficulties obtaining finance.
- Increased costs and delays while retrospective planning issues are resolved.
Where lender finance is involved, solicitors are often required to certify that the property’s current use complies with planning law before mortgage funds can be released.
Multi-let commercial properties
Permitted use becomes more complex where a property comprises multiple units occupied by different tenants.
For example, a retail parade may include a supermarket, a café, a pharmacy, a beauty salon and other units.
Each tenant may have different lease provisions and planning requirements. Solicitors therefore investigate each unit individually to ensure that every occupation is authorised.
This involves reviewing planning permissions, historic planning decisions, lease provisions, local authority searches, replies to commercial property enquiries and additional documentation provided by the seller or landlord.
The more units involved, the more detailed the investigation becomes.
Common issues encountered
During commercial transactions, solicitors frequently discover issues such as missing historic planning permissions, inconsistent descriptions of authorised use, changes of use undertaken without planning permission, long-established use with limited documentary evidence, and others.
Although many councils now operate online planning portals, permissions granted decades ago are often available in archived records or paper files. Obtaining replacement copies can take time and is a common reason why commercial transactions are delayed.
How property owners can prepare
Owners can significantly reduce delays by keeping important property documents readily available.
Useful documents include planning permissions, certificate of lawful development or lawful existing use, building regulations approvals, fire risk assessment, asbestos management surveys, building insurance, EPCs, leases and any supplemental deeds and licences, rent schedules, service charge accounts, health and safety records.
Having these documents available at the outset enables solicitors to conduct a thorough due diligence and assist with enquiries as appropriate.
How Dudden Law Can Help
Our commercial team, a Silver winner at the 2025 Welsh Law Awards, helps businesses across England and Wales get their commercial leases right. Whether you are taking on new premises, negotiating new terms, or handling with a commercial property dispute over how a property is being used, we will make sure the permitted use clause works for your business.
If you have questions about a commercial lease, our team is here to help.
Based in Cardiff and serving clients across South Wales and the UK, we’re ready to support you. Get in touch today — call us on 02921 320 150 or email info@duddenlaw.co.uk.
Insights from Yasmin Dakher, Dudden Law Solicitors
