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Can your landlord rent to your business competitor?

On Behalf of | Mar 12, 2020 | Commercial Real Estate

You’re a small business owner. You have a nice location near the center of town. But one day, you go to open up shop and see a new business moving in two doors down. When you go to welcome them, you realize it’s one of your competitors.

Is your landlord even allowed to rent to two businesses in the same industry? Can they work with your direct competitor when you signed a lease with them first?

Check your lease.

The first thing you should do is go running to your lease. Check for an exclusivity clause. This is a part of your lease agreement that says your landlord can’t rent to your business competitors.

If you don’t have an exclusivity clause…

Without written protection in your lease, there may not be much you can do. Start by talking with an attorney to make sure you’re exercising all your rights. If you really can’t stop your landlord from renting to your competition, consider the impact the situation might have on your business. Is it going to be a real detriment? If so, look at how long until your lease is up or look out at ways to get out of it. You may want to consider finding a new space for your business.

If you do have an exclusivity clause…

Look at the details of the clause. If it’s not very specific, it may not be enforceable. Review exactly what is stated and consider if it applies to your situation. Contact your landlord and start by having a calm conversation about the situation. Next, talk to a commercial litigation attorney. Have them look over your lease and they will help you choose the next steps to take, which may be a lawsuit.

Remember that your landlord is looking out for themselves, not for your business. While it’s nice to have a good relationship with them, protect your business first. If you need to leave your space, start looking. If you need to sue, get an experienced lawyer.