Make Sure Height Restriction Applies to Structures on Roof

If a tenant is constructing an outparcel at your center, you may not want the building to exceed a certain height. You may think that it would ruin your center's “look,” or your other leases may require you to protect the visibility of other tenants or areas within the center. So, you'll add a height restriction to the tenant's lease.

But if your lease is like many we've seen, it may have a loophole that could defeat your height restriction. The loophole: The lease doesn't address whether the height restriction applies to certain structures that a tenant may put on its roof, such as a parapet or mechanical equipment. Because of this loophole, if you tell the tenant to remove the parapet or mechanical equipment, the tenant may refuse to do so. That could lead to a major dispute between you and the tenant about what the height restriction should apply to.

Broaden Reach of Height Restriction

To plug this loophole and avoid disputes with your tenants, attorneys Jennifer R. Weily and Camilla Titterington of Developers Diversified Realty recommend that you say in the tenant's lease that:

• The height of the tenant's building can't exceed a certain number of feet;

• The height of the tenant's building must be measured perpendicular to the finished floor of the building (this avoids disputes about how to measure the building, says Weily); and

• The height of the tenant's building includes any screening, parapet, penthouse, mechanical equipment, or similar structure on the roof.

This puts your tenants on notice that they can't put any of those structures on the roof if, as a result, the building exceeds your height restriction, explains Titterington.

Add the following language to a lease where it discusses the restriction on the building's height:

Model Lease Language

The Building shall not exceed a height of [insert #] feet measured perpendicular to the finished floor elevation, including any screening, parapet, penthouse, mechanical equipment, or similar appurtenance located on the top of such building.

Practical Pointer: A tenant may demand that you agree to exclude its telecom equipment—such as antenna and satellite dishes—from your height restriction, says Weily. If the equipment is vital to the tenant's business, you may have to give in on this point, she says.

CLLI Sources

Camilla Titterington, Esq.: Legal Counsel, Developers Diversified Realty, 3300 Enterprise Pkwy., Cleveland, OH 44122-7249; (216) 755-5665.

Jennifer R. Weily, Esq.: Legal Counsel, Developers Diversified Realty, 3300 Enterprise Pkwy., Cleveland, OH 44122-7249; (216) 755-5647.