Glossary

Exclusive Use Clause

Updated June 2026

An exclusive use clause protects you as a tenant by barring the landlord from leasing nearby space in the same property to a competitor selling the same goods or services. A nail salon with an exclusive can stop a second salon from opening three doors down; a sandwich franchise can keep a competing sandwich shop out of the center. The clause protects the customer base you are paying rent to reach.

How it is enforced

The exclusive runs against the landlord, not the competitor. It obligates the landlord to refrain from signing a conflicting lease, and often to enforce existing leases against tenants who drift into your protected use. When a violation occurs, the path is to notify the landlord, point to the clause, and demand the use stop — backed by the remedies the clause provides if it does not.

Common carve-outs

A grant of exclusivity is only as strong as its carve-outs, and landlords negotiate several:

• Existing tenants. Anyone already in the center when you sign is usually exempt.
• Anchors. Large anchor stores are typically carved out entirely.
• Incidental sales. A competing product sold as a minor part of another tenant's business — a grocery selling coffee, say — often does not count.
• Thresholds. Some clauses only trigger above a square-footage or percentage-of-sales floor, so small overlaps are allowed.

Read the carve-outs as closely as the grant. They define what your exclusive actually buys you.

Remedies, and why you have to watch

When the landlord breaches, the remedies are spelled out in the clause and often escalate: reduced or substitute rent while the violation continues, a self-help right to require the landlord to act against the offending tenant, and ultimately a right to terminate if the breach is not cured within a window.

The point that gets missed is that an exclusive is an obligation to monitor, not just a clause to sign. No one tells you when a competitor opens nearby in violation of your exclusive — you have to notice it, match it against the lease, confirm it is not carved out, and invoke the remedy. Across many locations, that means watching the tenant mix at centers you do not control. It belongs alongside your other tracked rights, like the co-tenancy clause, as a lease obligation with an owner and a trigger.

Nova Foundry tracks the exclusive use protections at every location, so a violation is caught and acted on instead of quietly costing you sales.