Exclusive Use Agreement

Posted: December 8, 2020 in Uncategorized

Another important element of negotiating and designing the “exclusive right to use” is to ensure that existing tenants can continue their activities without interference. This means that existing tenants with widespread user rights (i.e. those who can use their premises for any authorized use) can effectively compete with the new tenant. In addition, the right of existing tenants to be “excluded” from the newer tenant`s “exclusive rights to use” should be pursued by rent renewals. Almost always, the carve-out continues regardless of a subsequent allocation or sublease. Another issue to consider is whether rent extensions for existing tenants should be protected from “exclusive use rights” beyond existing extension periods or whether rent changes that extend the size of the existing tenant or transfer the existing tenant would be protected in the same way. The exclusive use provision should also be clear about the leases it applies. A provision of exclusive use generally provides that the lessor cannot enter into a new tenancy agreement with a tenant that would violate the exclusive use provision. However, a tenant applying for an exclusive use clause should also consider the language that prevents the lessor (if the lessor has the power to authorize the changes in use) from changing the terms of use in existing tenancy agreements in a way that would be contrary to the tenant`s exclusive use provision. Ideally, exclusive use prevents any use of space in the mall that would compete with the tenant`s store, either by a new tenant or an existing tenant. The rules by which a court can use the use clause are an example. Most jurisdictions impose contracts according to the intent of the parties, as expressed in the agreement, or, if the agreement is ambiguous, as evidenced by parol evidence and fairly uniform building rules that require, for example, that the agreement be interpreted against the author.

However, another rule may apply to usage clauses. In Texas, for example, “the strict clauses of real estate instruments must be interpreted strictly, which favours the beneficiary and the funder, and all doubts must be removed in favour of the free and unlimited use of premises.” 6 A similar rule may apply in your jurisdiction. Many courts will issue the lease against the landlord. These rules are often due to public political arguments (regardless of what the parties to these transactions actually intended to do) who preferred a kind of party based on the historical bargaining power of such parties or on a political issue such as the total use of land. There are questions as to whether the language that many policyholders add to contracts requiring either an interpretation of the agreement against the author or specifying that this will not be the case would exceed these real estate-oriented rules of interpretation.

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