The challenge of the permitted use clause in shopping centre leases

Major shopping centres can be fierce in their interpretation and regulation of permitted use clauses in leases.

The permitted use clause details what you can sell or offer in your business.

Some newsagents are coming up against permitted use clause challenges when they evolve their businesses in response to market changes. I have and it can be a frustrating and expensive experience.

The ABC recently published a story about a hairdresser who refused a girl a haircut based on gender, because of the permitted use clause in their lease.

Vivien Houston was a regular at Jimmy Rod’s Barber Shop in The Gap Village Shopping Centre.

But when she turned up for a trim recently she was turned away because she was female.

Jimmy Rod’s managing director James O’Brien said women were not able to have haircuts at the shop because of a new lease agreement he had signed with the local shopping centre management.

It is important that anyone signing a lease does so knowing the full implications of the lease and, in particular, the permitted use clause. If I was a hairdresser I would not want my business to be in a position of turning anyone away because of gender.

It is disappointing the landlord sought this type of restriction for the barber shop. However, it is not uncommon for landlords to set permitted use stipulations that look ridiculous and non-commercial  on small businesses. It is a cost of business for those of us who trade in shopping centres so I guess we often suck it up.

We are in a retail world of rapid and considerable change. Legislating borders is out of date with the retail situation of today.