What do you do when your exclusive use clause has been violated?

On Behalf of | May 24, 2019 | Business Law

When you negotiated your current commercial lease, you took care to make sure that your landlord couldn’t rent out space in the same building or complex to one of your direct competitors via an exclusive use or “exclusivity” clause.

Apparently, your landlord didn’t quite comprehend what was meant by an “exclusive use clause.” This is particularly a problem in large shopping centers among commercial enterprises because there can be a lot of crossover between businesses.

For example, imagine that you specialize in offering consumers and businesses white box computers — the kind that gets built to order for specific needs. You have an exclusivity clause in your commercial lease to protect your interests — and the landlord agreed to it. However, the office supply store that operates at the other end of the plaza suddenly expands its merchandise line and begins offering laptops for sale. Your landlord didn’t see a problem with it because the laptops are all premade items from big-name brands.

What can you do? First, review your lease and see if it protects your rights as clearly as you remember. That way, you know that you have some solid legal ground to stand on.

Second, look at your lease to see who is responsible for enforcing the exclusivity clause. If you negotiated it well, your landlord has the responsibility to address the issue with the infringing tenant because of your “protected” status.

Third, address the issue with your landlord clearly and calmly. You have every right to enforce the clause that’s designed to protect your source of income — so this isn’t a time to be vague about what needs to happen.

If your landlord doesn’t step up and take the appropriate action, you can then explore the other remedies available to you. You may be able to void your lease — or force the landlord to comply with its terms. You may also be entitled to damages if your store suffered a significant loss due to the landlord’s negligence.

If your business is threatened because a landlord violated the terms of your lease, don’t try to handle the situation on your own. A business law attorney in Georgia can discuss your situation and advise you on how to proceed.