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Can commercial landlords pick the type of business they want?

On Behalf of | Oct 5, 2022 | Commercial Leases

A commercial landlord may buy a property with some ideas already in mind about the type of businesses they would like to have in that space. Maybe they just think it fits the area or it fits the type of building that they bought. In any case, it’s their property and they have plans for how they want to develop it.

It is common for commercial landlords to ask business owners what type of business they’re going to run as part of the pre-screening process. If the landlord believes that the business idea is not going to be successful, or if they see red flags in the financial statements provided by the business owner, they may decide not to rent to that individual. They’re certainly allowed to do this on the grounds that specific businesses might appear to be too much of a risk to them and they may not believe the lease will be paid.

Avoiding discrimination

One thing that is important for commercial landlords to remember is that they need to be careful to avoid discriminating against any of the potential tenants. Discrimination on the grounds of things like religion, race or gender is prohibited, just as it is with residential properties.

So, a business owner may believe that they can deny someone the space by claiming they don’t want that type of business to be at the location or that they don’t think it is going to succeed. And that’s fine from a business perspective, but they need to be sure that they’re not actually denying it based on one of these protected classes.

You can see why it’s so important to get the details right and why anyone working in the commercial property industry needs to make sure they always understand their legal options. You don’t want to make a mistake that puts your investment in jeopardy.