Short answer. Generally no, not without the lessor's agreement. Article 1657 of the Civil Code obliges the lessee to use the thing leased as a diligent father of a family, devoting it to the use stipulated. If the unit was rented as a home, turning it into a business changes that agreed use.
What the law says
To use the thing leased as a diligent father of a family, devoting it to the use stipulated; and in the absence of stipulation, to that which may be inferred from the nature of the thing leased, according to the custom of the place
Civil Code, Article 1657 — Obligations of the Lessee. Read the full provision →
A tenant must stick to the agreed use
Among a lessee's core duties, Article 1657 requires him to use the thing leased as a diligent father of a family, devoting it to the use stipulated; and in the absence of stipulation, to that which may be inferred from the nature of the thing leased, according to the custom of the place. When a unit is rented as a dwelling, the stipulated use is residence. Running a business from it, a shop, a workshop, a place receiving customers or storing stock, departs from that use. The obligation is not a mere formality; it defines what the tenant is entitled to do with someone else's property, and a home let for living in was not let for commerce.
Where there is no express stipulation
Even if the contract does not spell out "residential use only," the tenant is not free to do as he likes. The article supplies a fallback: the property must be devoted to the use inferred from the nature of the thing leased, according to the custom of the place. A residential unit, by its nature and by ordinary expectation, is for habitation. So a commercial operation is generally outside the permitted use whether or not the lease says so in words. What the parties intended is read from the character of the premises and local practice, not from the tenant's later convenience.
What a violation can cost the tenant
Devoting the premises to a use not stipulated is a breach of the lessee's obligations, and it carries consequences. A lessor faced with this may treat it as a violation of the conditions of the lease, and it can become a ground to end the lease and eject the tenant, especially where the misuse causes deterioration or exposes the property to added risk or liability. Beyond the lease itself, operating a business also brings its own regulatory requirements, permits, zoning and the like, which a residential arrangement does not satisfy. The tenant who quietly converts a home into a business stands on weak ground on more than one front.
The clean way to do it
None of this means a home can never host a business; it means the tenant should not do it unilaterally. The straightforward path is to obtain the lessor's consent, ideally by amending the lease to permit the intended commercial use, and to comply with the separate legal requirements that running a business entails. A landlord may agree, perhaps on adjusted terms, or may refuse, which is his right where the premises were let as a residence. Securing that agreement first avoids the risk of ejectment and protects the investment a tenant might otherwise sink into a business the lease never authorised.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Efren S. Quesada, et al. vs. Bonanza Restaurants, Inc, G.R. No. 207500, November 14, 2016 — read the decision on LawPhil →
- Victoria N. Racelis vs. Spouses Germil Javier and Rebecca Javier, G.R. No. 189609, January 29, 2018 — read the decision on LawPhil →