Encyclopedia
Exclusive use
A lease clause stopping the landlord from leasing other space in the property to a competitor.
For example: A pharmacy negotiates an exclusive so the landlord can't lease another unit to a pharmacy in the same centre. (Illustration only, not a real deal.)
This is a general industry term with no single official definition. Your lease or contract wording controls.
Example only, not a real client. Say you open a café in a small neighbourhood retail centre and negotiate an exclusive so the landlord cannot lease another unit to a café. Two years later the landlord proposes a bakery that sells coffee. Because the exclusive defines your protected use clearly, you can raise it before that lease is signed.
What I’d tell a friend
If your business depends on an exclusive, define it clearly and make sure the lease says what happens if it is breached.
Why it matters to you
It can stop the landlord leasing to a direct competitor next door. Without it, your best customers can walk to a rival in the same centre.
How to use it in your deal
Tenants should define the protected use carefully, wide enough to matter but specific enough to enforce, and say what happens if it's breached: rent reduction, a right to terminate, or both. Ask that it cover the whole property, including pad sites, and any adjoining land the landlord owns.
Landlords should keep exclusives narrow, carve out existing tenants and anchors, and make them end if the tenant stops operating that use or assigns to a different business. Keep a master list of exclusives so leasing staff don't breach them by accident. Buyers should review every exclusive before buying, since one broad clause can block a whole category of future tenants. Lenders may also look at exclusives when assessing lease-up risk.
Mistakes I see
Vague wording like "food uses". No remedy for breach. Landlords forgetting old exclusives when leasing new space. Exclusives that survive after the tenant changes its business.
In BC and Vancouver
The lease controls. Competition law can apply to restrictive clauses in some cases. BC courts enforce exclusives according to their wording.
Official sources: CanLII (court decisions) · Competition Act (Justice Laws)
Defining the protected use
An exclusive limits the landlord from leasing other space in the property to a competing use. The definition is everything: too narrow and competitors slip through, too broad and the landlord may refuse.
Landlords often ask for exceptions, such as existing tenants, large stores or incidental sales. Read those closely.
If the exclusive is breached
Ask for a rent reduction while the breach continues and the right to end the lease if it lasts. Without a remedy, an exclusive can be hard to enforce.
Exclusives can raise competition and enforcement questions, so check with a BC lawyer on your wording.
Questions to ask before you sign
- What exactly is protected?
- Which properties does it cover?
- What's the remedy for breach?
- When does it end?
- Which existing tenants are excluded?
How exclusives get narrowed
An exclusive-use clause is only as wide as its words. Landlords cabin them with exceptions, ancillary sales, and radius limits. Tenants who accept “exclusive for coffee” without defining food uses often meet a competitor selling nearly the same thing.
Ask who else already has an exclusive that could block you. Put the exclusive in the offer to lease, not in a side email.
Your lawyer should test the drafting against how you actually sell.
Keep reading
Related terms: Permitted use, Anchor tenant
- Leasing out commercial space in BC: a landlord's guide
- Leasing commercial space in BC: a tenant's guide
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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.