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Can I refuse to rent to certain businesses?

On Behalf of | Jul 30, 2020 | Commercial Leases

Commercial real estate laws are much different than those for residential real estate because the goals are different. In commercial real estate, you have the right to limit who you rent to. 

While you cannot discriminate based on protected factors, such as race or religion, the California Department of Real Estate does state that you have the right to limit the use of your property. Essentially, this means that you can deny a rental application if you do not like the specific business the applicant wants to put there. 

Contract details

You can include in your contract limitations about the use of the property. This would allow you to exclude certain businesses for the premises. It is essential to ensure your contract is clear and covers everything possible to exclude certain types of businesses. If your contract is not precise, then you will have no legal grounds upon which to object to the business operations. 

Change of business

If your tenant suddenly changes his or her business or shifts the focus to something of which you do not approve and it violates the contract, then you can terminate the agreement. You may still have to go through the eviction process. The tenant may also have the right to end your agreement in some situations without a breach occurring. 

Illegal activities

If the business activities are not legal, then you still must state in your contract that the tenant cannot use the property for illegal purposes if you want to be able to end the agreement. Illegal activity is not an automatic trigger for your rights to evict.