Negotiating Restrictive Covenants that Diminish the Ability of Landlords to Enter into Leases and Grant Signage Rights


Putting aside governmental regulations, such as zoning regulations, landmarks regulations and laws prohibiting transactions with entities believed to be conducting business with terrorists, one would think that the owner of a commercial building could freely lease its space to the most qualified and attractive tenants, and could grant identifying signage rights to these tenants to facilitate the consummation of a deal. But this is not always the case.

By way of example, if you were a tenant negotiating a lease in a shopping mall for a high-end coffee shop, wouldn’t you insist that the landlord not lease other space in the same shopping center to one of your competitors? If you were the managing partner of a law firm negotiating a lease for seventy percent of an office building that would highlight your firm’s name at the entrance to the building and on the wall behind the concierge desk, wouldn’t you insist that the landlord not grant exterior or lobby signage rights to another law firm? Wouldn’t you also insist that any identifying signage granted to another non-law firm tenant of the building be far less prominent than your firm’s signage?

To read the full article, click on the PDF linked below. Republished in Law360 on July 24, 2014.


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