Many property owners lease land for commercial tenants, like 7/11. Sometimes, the tenant builds the structure themselves.
Freelancers and small landlords often ask: do I still need permits or pay taxes for a building I didn’t construct?
Understanding this prevents legal issues and ensures compliance with local government requirements.
What Are Mayors Permit, Tax, Sanitary, and BFP Requirements?
- Mayor’s Permit – Required for all business operations, even if you only own the land.
- Tax Payment – Real Property Tax (RPT) still applies to land ownership.
- Sanitary Permit – Typically needed for operations that involve food, health, or sanitation. BFP Clearance – Fire safety requirement for buildings where public access occurs.
Ownership vs. operation is the key factor here.
Why These Permits Matter
Even if you did not construct the building:
- Local governments track all structures for safety and taxation.
- Proper permits prevent fines.
- Ensures tenant compliance does not implicate you.
Landlords must understand responsibilities vs. tenants’ duties.
Do You Need Permits and Tax Payments?
Key points:
- Mayor’s Permit: Generally, the tenant obtains this, not the landowner.
- Taxes: You still pay Real Property Tax (RPT) on the land.
- Sanitary Permit: Usually the tenant applies, unless the business is considered under your responsibility.
- BFP Clearance: Typically the tenant, as the one operating the business, secures this.
Check your lease agreement: clarify responsibilities between landlord and tenant.
How to Handle Compliance as a Landowner
- Verify your lease agreement clearly states tenant responsibility for permits.
- Confirm property taxes are paid under your name.
- Keep copies of all permits obtained by the tenant.
- Notify the local government of property usage changes.
- Regularly review compliance to avoid unexpected penalties.
When/Who Should Take Action
Landlords should review permits and taxes:
- When leasing to commercial tenants
- When tenants build on your land
- When local ordinances change
Early action ensures smooth operations and avoids surprises.
Practical Tips
- Always clarify responsibilities in writing.
- Keep communication open with tenants.
- Maintain accurate property records.
- Consult local RDO or municipal offices for guidance.
- Seek professional advice if unsure.
Even if your tenant built the building, you remain responsible for property tax. Permits and operational licenses are usually the tenant’s responsibility. Clear agreements and proper documentation ensure compliance and peace of mind.
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