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In the Spotlight: The Simple Use Clause ' Complex Problems Caused By a Simple Provision

By Jack Garson
March 28, 2006

Every lease has a use clause. Most get little thought or attention. Use clauses permit a tenant to do any number of things. Next question?

But wait a minute. You, the landlord, just signed a lease permitting the tenant to close its doors whenever it wants. You just permitted the tenant to sell products that may violate other tenants' use clauses, or at least upset other tenants by cutting into their core product sales. Or, you just allowed the tenant to alter its product mix and dramatically reduce the percentage rent that you will receive. Or, you just allowed the tenant to increase the intensity of its use of your property, potentially raising costs for all of your tenants and limiting your ability to lease other premises.

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