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Title 5 Hiring
CHAPTER 7.  USE RESTRICTIONS

This chapter applies to a restriction on use of leased property by a tenant under a lease of real property for other than residential purposes. Title 5, Chap. 7, 1997.010

As used in this chapter:

(a) "Landlord" includes a tenant who is a sublandlord under a sublease.

(b) "Lease" means a lease or sublease of real property for other than residential purposes, and includes modifications and other agreements affecting a lease.

(c) "Restriction on use" means a provision in a lease that restricts the use of leased property by a tenant, whether by limiting use to a specified purpose, mandating use for a specified purpose, prohibiting use for a specified purpose, limiting or prohibiting a change in use, or otherwise.

(d) "Tenant" includes a subtenant or assignee.  Title 5, Chap. 7, 1997.020

Nothing in this chapter authorizes a restriction on use that is otherwise prohibited by law. Title 5, Chap. 7, 1997.030

(a) For the purpose of subdivision (a) of Section 1951.2 (damages on termination for breach), the amount of rental loss that could be or could have been reasonably avoided is computed by taking into account any reasonable use of the leased property.  However, if the lease contains a restriction on use that is enforceable under this chapter, the computation shall take into account the restricted use of the property except to the extent the tenant proves that under all the circumstances enforcement of the restriction would be unreasonable. The circumstances include, but are not limited to, those involving both the leased property and any building or complex in which it is located.

(b) The remedy described in Section 1951.4 (continuation of lease after breach and abandonment) is available notwithstanding the presence in the lease of a restriction on use of the leased property. The restriction on use applies under Section 1951.4 if it is enforceable under this chapter except to the extent the tenant proves that under all the circumstances enforcement of the restriction would be unreasonable. The circumstances include, but are not limited to, those involving both the leased property and any building or complex in which it is located. Title 5, Chap. 7, 1997.040

Except as provided in Section 1997.270, this chapter applies to a lease executed before, on, or after January 1, 1992.  Title 5, Chap. 7, 1997.050

Article 2.  Use Restrictions

(a) Subject to the limitations in this chapter, a lease may include a restriction on use of leased property by a tenant.

(b) Unless the lease includes a restriction on use, a tenant's rights under a lease include any reasonable use of leased property.  Title 5, Chap. 7, 1997.210

    An ambiguity in a restriction on use of leased property by a tenant shall be construed in favor of unrestricted use. Title 5, Chap. 7, 1997.220

    A restriction on use of leased property by a tenant may absolutely prohibit a change in use.  Title 5, Chap. 7, 1997.230

    A restriction on use of leased property by a tenant may provide that a change in use is subject to any express standard or condition.  Title 5, Chap. 7, 1997.240

    A restriction on use of leased property by a tenant may require the landlord's consent for a change in use subject to any express standard or condition for giving or withholding consent, including, but not limited to, either of the following:

(a) The landlord's consent may not be unreasonably withheld.

(b) The landlord's consent may be withheld subject to express standards or conditions. Title 5, Chap. 7, 1997.250

    If a restriction on use of leased property by a tenant requires the landlord's consent for a change in use but provides no standard for giving or withholding consent, the restriction shall be construed to include an implied standard that the landlord's consent may not be unreasonably withheld. Whether the landlord's consent has been unreasonably withheld in a particular case is a question of fact on which the tenant has the burden of proof.  The tenant may satisfy the burden of proof by showing that, in response to the tenant's written request for a statement of reasons for withholding consent, the landlord has failed, within a reasonable time, to state in writing a reasonable objection to the change in use. Title 5, Chap. 7, 1997.260 (a) Section 1997.260 applies to a restriction on use executed on or after January 1, 1992. If a restriction on use executed before January 1, 1992, requires the landlord's consent for a change in use of leased premises by a tenant, but provides no standard for giving or withholding consent, the landlord has sole and absolute discretion to give or withhold consent.

(b) For purposes of this section, if the terms of a restriction on change in use are fixed by an option or other agreement, the restriction on change in use is deemed to be executed on the date of execution of the option or other agreement. Title 5, Chap. 7, 1997.270          

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