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Restrictive Covenants in Commercial Developments

By Paul Robeznieks
July 28, 2005

Recorded restrictive covenants in commercial developments present many issues. Two important factors to consider when granting such covenants include: 1) the reoccurring impact that they may have over the life span of a shopping center, and 2) the potential impact of such covenants on the current and future objectives of landlords and tenants who are parties to them.

The recorded agreements between property owners (and sometimes major tenants) that set forth the guidelines for the construction, management and operation of a multi-parcel commercial retail development are generally known under a variety of names such as “conditions covenants and restrictions,” or “reciprocal easement agreements” or “operation and easement agreements” (collectively an “REA” for purposes of this article); yet whatever the name of the recorded agreements, they are generally intended to add value to the shopping center and protect the interests of the property owners and tenants, as the case may be.

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