The Purpose of an Exclusive Use Clause

If you’re looking for a new property to run your business, there are many things that you should take into consideration.  Does the location target the intended audience?  How big of a space do you need?  How much money are you able to spend on the lease?  And most importantly, what should you look for in a commercial lease?  (Related topics: New York real estate attorney, New York real estate lawyer)


Regarding the lease, there are 5 essential elements that need to be considered: Parties Clause, Premises Clause, Rent Clause, Term Clause, and Use Clause.  There’s also another clause that should be reviewed, which is called the exclusive use clause.  This clause allows the tenant to use the property for a specific purpose and restricts other tenants in the shopping center from using the premises for the same or similar use.


When you’re reviewing a commercial lease, you should consider if this is something that you want for your business.  If you request this, though, you should make sure that the clause is used for its intended purpose.  This is because broad exclusive use provisions may be unenforceable and cause problems in the future.  Remember that your intention isn’t to keep all of the other properties empty, but to limit the competition of nearby stores.


For this clause to be successful, there are certain things that your commercial lease should state.  For instance, the provision should be clear about if this rule pertains to new tenant leases or existing leases as well.  Additionally, you should have options on what you’re able to do if the landlord doesn’t enforce the provision, such as the right to terminate the lease or the right to pay a lower rent.


Before you sign a commercial lease, it’s recommended that you have a real estate lawyer in NYC review it.  This is because the real estate lawyer in NYC will be able to identify unfair terms and conditions, as well as negotiate the exclusive use clause and other clauses.  For more information, contact us at Gary Wachtel.

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