Negotiating a commercial lease is nothing like negotiating a residential one. There are laws in place that are designed to protect the ordinary consumer, but the commercial renter is pretty much on their own to spot a bad deal when they see one.
With that in mind, it’s smart to know as much as you can about some of the biggest clauses a commercial lease may have: The use and exclusive use clauses that can either limit or protect your business aspirations.
What’s a use clause?
A use clause essentially tells you what you can and cannot do with the space you’re renting. It can force you to stay open (or closed) during certain hours, limit the types of signs you put up, and prevent you from changing your operations significantly without permission from the landlord.
What’s an exclusive use clause?
This clause guarantees a business that nobody else in the same building, mall or plaza will be in direct competition by offering the same services or products you carry.
You probably won’t have this clause in your lease unless you negotiate (hard) for it because it serves your interests more than your landlord’s. Landlords may be unwilling to agree to this kind of clause unless you are a particularly valuable renter with an established history that they are confident will attract customers and other renters their way.
Are you trying to negotiate a commercial lease?
Don’t do this alone. Even experienced commercial tenants can struggle to fully understand the terms of a complex lease. Newcomers to the game are at a terrible disadvantage against a savvy landlord.
Protect your interests and your company’s future by working with an experienced attorney as you explore your leasing options.