Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Commercial Leasing Law & StrategyFeaturesKickerLJN NewslettersNewsSections

Will That Restriction Hold Up?

By Peter J. Marino, Scott A. Miskimon and Lauren H. Bradley
February 28, 2015

For both commercial tenants and landlords, use restrictions are a valuable asset. For the tenant, use restrictions are critical to protecting the value of its business by preventing another tenant from competing for customers in the same shopping center by selling the same or similar goods and services. For the landlord, use restrictions enable the owner to implement its strategy to produce the “tenant mix” it believes will maximize customer traffic and sales, thereby enhancing the value of the property. Given their critical nature to both parties, use clauses, exclusives and prohibited uses are among the most heavily negotiated provisions of any retail lease. As a result, the final draft may contain a number of compromises and vagaries that are understood only by the original parties involved. Moreover, use restrictions are unique due to the frequency with which they are reviewed and referred to during the day-to-day operations of a shopping center, long after the lease has been signed. Use restrictions are a constant topic of conversation among retailers, leasing and management personnel and their attorneys: whether a proposed new tenant is going to create controversy due to restrictions in existing leases, whether to seek or grant a waiver letter to allow a use that would otherwise be prohibited, and so on.

Most disputes over use restrictions are resolved amicably before litigation. However, it is important to understand the legal framework within which the matters would be litigated in court rather than to rely on intuition, even intuition that may have been informed by years of experience in the industry. This article summarizes the most important factors affecting the enforceability of use restrictions, both from a landlord and a tenant perspective.

This premium content is locked for Commercial Leasing Law & Strategy subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
The DOJ's Corporate Enforcement Policy: One Year Later Image

The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.

Use of Deferred Prosecution Agreements In White Collar Investigations Image

This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.

The DOJ's New Parameters for Evaluating Corporate Compliance Programs Image

The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.

CLE Shouldn't Be the Only Mandatory Training for Attorneys Image

Each stage of an attorney's career offers opportunities for a curriculum that addresses both the individual's and the firm's need to drive success.

A defendant in a patent infringement suit may, during discovery and prior to a <i>Markman</i> hearing, compel the plaintiff to produce claim charts, claim constructions, and element-by-element infringement analyses.