Do you need an exclusivity clause in your commercial lease?

On Behalf of | Oct 10, 2022 | Commercial Real Estate Leases | 0 comments

Whether you are looking to open your own business, diversify your company’s real estate, or simply make a new investment, your efforts will culminate in signing a commercial lease. However, you should always check a lease for terms that can make or break your financial strategy.

One favorable element that many commercial lessees overlook is the exclusivity clause. The lack of exclusivity can lessen the value of your property and may even lead to heated disputes with your landlord down the line.

The benefits of an exclusivity clause in real estate

Exclusivity rights protect you from the possibility of your landlord renting property to another business similar to your own. It is easy to imagine how the presence of a competitor next door might eat into your profits. Having an exclusivity clause in your lease can protect the investment you make into a piece of real estate so that it continues to produce value for you in the long term.

What to do if your lease does not have an exclusivity clause

If you find yourself in a commercial agreement without an exclusivity clause, you should consider other methods for protecting your finances in the event of a competitor cropping up nearby. Florida statutes explain how your lease renewal period affects the length of notice you must give to terminate your tenancy. If you opt for a month-to-month renewal, for example, you can vacate a property that is no longer profitable with as little as 15 days’ notice.

Negotiating for an exclusivity clause is one of the many ways you can use your lease to protect your investment. It is something worth considering every time you approach the signing of a commercial lease.