A Secret Weapon: The "No Business" Lease Clause

A Secret Weapon: The "No Business" Lease Clause

Property Manager · SC · Member since 2025 · 16 posts · 9 votes

I've been scrolling through a Reddit thread asking property managers about the "small, weird rules" they've added to their leases, and one response was a goldmine.

It's a simple, but often overlooked, clause: “Operating any business on the premises is prohibited.”

This might sound obvious, but this landlord's reasoning was spot on. A tenant's "side hustle" can quickly turn into a full-scale operation that negatively impacts your investment. Think about it:

  • A "yard sale" that runs all year
  • A car repair shop in the driveway
  • An in-home daycare
  • An Airbnb rental

These operations can lead to increased vehicle traffic, parking issues, noise complaints, and potential liability problems that you, the owner, are ultimately responsible for. They can also violate local zoning laws without you even knowing.

This one simple rule protects your property and your peace of mind. It’s a proactive step that clarifies what is and isn't acceptable and helps you avoid awkward conversations and potential headaches down the road.

I've already updated my leases to include specific language that prohibits any business use that impacts the property or the community.

So, here's my question to the BiggerPockets community: What's the weirdest business or side hustle a tenant has tried to run out of one of your rentals? And what's your go-to lease clause to prevent it?

0Reply
96 views

3 Replies

Jump to latestLatest
  • Kerry BairdPro Member
    Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
    1y

    That is a good clause to add to a lease.  I don’t know that I have ever has a property impacted by a tenant’s side gig.  I imagine tenants did have one, but I haven’t been aware of it. Would be interesting to hear of other situations. 

  • Investor · Cincinnati · Member since 2025 · 9 posts · 13 votes
    1y

    I saw that thread too! Interesting stuff. I've never personally had an issue with this, but I've heard of in-unit daycares becoming a huge noise problem for neighbors.

  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    1y

    @Corey Goldstein boat engine repair. No problem until he decided to hang a big engine off one of the big maples on the side of the house.  We didn't have a clause saying that is not what we use trees for here but we did have a no business clause and told him to get it out of there. 

Join the conversationCreate a free account to reply, vote on answers and follow this thread.