Parties to a commercial lease, whether you are a landlord or tenant, have rights and responsibilities they must follow. One such right your lease might include is the right to exclusivity. This article will explain what rights to exclusivity or exclusive possession mean in a commercial lease.
This cheatsheet includes practical tips to understand key clauses and avoid disputes in leasing agreements.
What is a Commercial Lease?
A commercial lease is where a business owner occupies a property or part of it to run their business, becoming the commercial tenant. The property owner, or commercial landlord, agrees to the lease for a specified period in return for rent.
A commercial agreement governs a commercial lease. This is a legally binding contract that will detail all the lease terms, including:
- the length of the lease;
- the agreed rental amount;
- permitted use or uses of the lease;
- any rent review mechanism in the lease;
- existence of a break clause;
- alienation covenants;
- repair and maintenance obligations for either party;
- any contracted-out clause; and
- termination rights.
A commercial lease also grants the right to the commercial tenant of exclusivity in the commercial lease, often referred to as the right to exclusive possession.
Right to Exclusivity
A commercial lease grants a tenant the right to occupy the property with the landlord’s consent. Where a tenant has a commercial lease, the rights to exclusivity means they have contractual rights and a proprietary interest in the property or land they occupy. This right is also the right to exclusive possession.
Rights to exclusive possession for a commercial tenant in the property mean they have the right to exclusively use the defined area of the property in the lease agreement during the lease term.
Exclusivity in Your Lease
In practice, the right to exclusivity or exclusive possession means that the commercial tenant enjoys total control over the property or part of it. Therefore, the tenant has specific rights over the property as though they are the actual landowner (the landlord), which include:
- sole access to their commercial premises;
- no obligation to share the occupation of the premises with another third party; and
- no obligation to allow another third party to use the premises.
The rights apply to the landlord, too, who the law considers a ‘third party’. This right to restrict the landlord’s access to the commercial premises is the tenant’s right to quiet enjoyment. However, as each lease agreement is different, there might be situations where a landlord can enter the premises, such as to conduct inspections. You should always consult your lease agreement to fully understand your rights and obligations.
If you enjoy the right to exclusive possession, you can also choose what to do with your space, You might decide to (but may require the landlord’s permission):
- sublet the premises or part of; or
- assign the premises to another third party.
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Key Takeaways
A fundamental right for a tenant in a commercial lease is the right to exclusivity or exclusive occupation throughout the lease term. This means that the tenant has control of the commercial premises regardless of whether or not they are physically on the premises during their commercial lease term. Therefore, they enjoy specific rights similar to if they were the property owner.
If you need help understanding or drafting your lease agreement, our experienced leasing lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
A commercial lease is where a property owner grants a business owner the right to occupy their property as their business premises in return for rent.
The right to exclusivity or exclusive possession in a commercial lease is the tenant’s right to control the premises to the exclusion of others, including the landlord.
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