Frequently, commercial real estate litigation begins with a landlord’s concerns. Landlords may initiate legal proceedings to evict a tenant or collect unpaid rent.
However, tenants also have protection under the law. They can ask the civil courts to enforce a lease if their landlord violates the agreement. Landlords could violate a lease by failing to maintain the facilities or ignoring the right of first refusal extended to an occupant when listing the property for sale.
Commercial tenants could also hold their landlords responsible for damaging their business prospects if they have the right clauses in their leases. If a tenant signed a lease with an exclusive use clause, the arrival of a competitor at the same facility could be grounds for litigation.
What is an exclusive use clause?
An exclusive use clause effectively protects a tenant from operating in close proximity to a business that performs the same functions. An exclusive use clause could prevent a landlord from leasing two units in the same shopping mall to different shoe stores, for example.
If a landlord rents a nearby or adjacent unit to a business in the same industry that offers the same goods and services, the commercial tenant who signed their lease earlier may have grounds to take legal action. The violation of an exclusive use clause could cause a significant decrease in company revenue. Tenants could seek damages. They could also ask the courts to allow them to terminate the lease.
Reviewing a commercial lease can help frustrated business tenants understand their options. When landlords don’t respect the terms of the leases they signed, tenants can sometimes take action to hold them accountable.
