Negotiating Exclusive Use and Restrictive Covenant Provisions in Office and Retail Leases

Description

Restrictive covenants and exclusive use provisions are contentious issues in lease negotiations and are frequently litigated. Negotiating these clauses requires a careful balancing of the landlord’s need for flexibility in obtaining future tenants against the tenant’s right to minimize competition.

One of the toughest hurdles in drafting and negotiating restrictive covenants and restrictive use provisions is defining a competitor, which is often more challenging in office commercial leases than retail leases. Another challenge is signage rights and restrictions since signage exclusivity can restrict the landlord’s ability to attract future tenants.  

Restrictive use and covenants are generally strictly construed by courts, making them difficult to enforce. The outcome of litigation will depend on the specific lease language. Thus, careful and precise drafting of these provisions is critical.

Listen as our authoritative panel of real estate practitioners guides you through the process of drafting and negotiating restrictive covenants and exclusive use provisions in office and retail leases and how to protect the interests and rights of both landlords and tenants. The panel will also discuss recent case law on enforcement of these provisions.