We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
Many shopping center leases include “radius clauses” banning tenants from opening similar businesses within a certain radius of the leased location. The idea is to prevent tenants from establishing essentially identical establishments to siphon off revenues and thereby minimize gross sales subject to percentage rent under the lease. Although protecting gross rent revenues is a legitimate business interest, radius clauses are frowned on because they stifle new business and competition.
There are two ways to evict a tenant: (1) “Actual eviction,” or going to court to get an eviction order, is the proper way; and (2) “constructive eviction,” or doing something so egregious to interfere with the tenant’s business that it forces the tenant to leave, is the other way—one you want to avoid at all costs. The term “constructive eviction” is misleading since the tenant actually decides to leave without being ordered to. But while the “eviction” is a legal fiction, the legal consequences are very real.
An owner’s right to evict a tenant for not paying rent on time is a staple of any commercial lease. But like any other lease right, it can be waived. One way to do that is by formal, written agreement with the tenant. But more often than not, waiver of the right to timely rent is the result not of bilateral agreement but of action on the part of the owner that leads the tenant to infer that the right is being waived. The most common example of waiver by action: accepting a tenant’s late rent payments.
RSS