Renting a space to start a new professional practice or a retail shop may be the last step in the development of a planned business. Once there is a physical location for customers or clients to visit, the company may start generating revenue.
Leasing is often the most cost-effective solution for entrepreneurs starting a new business and successful companies expanding into new locations. Frequently, a rented unit at a larger shared facility generates the most foot traffic. Commercial developments with multiple units can attract customers and visitors. Business leaders signing leases at these types of facilities may need to negotiate with their landlord or lease terms that protect them against nearby competition.
Exclusive use clauses protect existing tenants
The terms of a commercial lease can do more than just set rent and establish maintenance obligations. Commercial leases can also limit the economic activities of either party. Landlords may include use clauses that limit the functions for which tenants use the property. In exchange, tenants may request the inclusion of an exclusive use clause.
An exclusive use clause prevents the landlord from renting a nearby vacant facility to another business that offers the same goods or services. These clauses give the tenant the exclusive right to operate a specific type of business at a multi-unit property or within a certain geographic area.
Reviewing a commercial lease with a skilled legal team and negotiating for custom terms can help business owners protect their investments and avoid getting locked into a long-term lease with competing businesses too close for comfort. Business leaders may need assistance reading through complex commercial lease documents and working with a landlord to secure optimal legal protection, and that’s okay.