When a commercial landlord and new tenant intend to enter a commercial lease together, they will negotiate and draw up a lease agreement. This contains the obligations and rights of both parties concerning the commercial lease.\u00a0Usually, a tenant\u2019s professional representative will draft this, but they must first make enquiries.\u00a0The commercial lease is not legally binding until the commercial lease agreement is complete and signed.\u00a0<\/p>\n\n\n\n
However, as the tenant has started work towards the potential commercial lease, they may be keen to ensure they have an exclusive right that the landlord will grant the lease to them.\u00a0They may, therefore, enter into an exclusivity agreement.\u00a0This article will explain the merits of an exclusivity agreement when granting a commercial lease in the UK.<\/p>\n\n\n\n
A commercial tenant and landlord may draw up an exclusivity agreement when a commercial landlord is considering granting a lease to a commercial tenant.\u00a0You may also hear people refer to it as a \u2018lock-out agreement\u2019.\u00a0It is an agreement between the landlord and tenant that the landlord, for a specific \u2018exclusivity period<\/a>\u2019, will not negotiate with other business owners who may wish to lease the commercial property.<\/p>\n\n\n\n A commercial landlord and commercial tenant may decide to create an exclusivity agreement where they both have genuine intentions to enter the commercial lease.\u00a0They will enter into this while enquiries take place to draw up the commercial lease. Both parties enter into the lease agreement with good faith.<\/p>\n\n\n\n There are important reasons why a commercial landlord and commercial tenant may wish to enter into an exclusivity agreement when granting a commercial lease<\/a> in the UK. <\/p>\n\n\n\n When parties negotiate and draw up a commercial lease, the tenant\u2019s professional representative, such as their conveyancer, will inquire into the commercial property.\u00a0This may be necessary so the tenant can understand the details of the commercial premises they intend to occupy. Answers to these may affect the lease terms<\/a> and potentially the decision to proceed.<\/p>\n\n\n\n A commercial tenant will spend money and time instructing these enquiries, so will want to secure the landlord\u2019s intention to enter the commercial lease to ensure the enquiries are worthwhile. It would be a waste of their time if, while doing so, the commercial landlord could negotiate with other potential retail tenants and proceed with a commercial lease with another business owner.<\/p>\n<\/div>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\nWhy Use an Exclusivity Agreement?<\/h2>\n\n\n\n