Lease user clause found to be unenforceable under competition law

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Summary: The first case to consider the compliance of a lease use restriction with the prohibition on anti-competitive agreements in the Competition Act 1998 may cause landlords some disquiet.

You should read this if concerned in asset management - lease user restrictions, if considered to be anti-competitive, may be unenforceable.

The first case to consider the compliance of a lease use restriction with the prohibition on anti-competitive agreements in the Competition Act 1998 may cause landlords some disquiet.

In an unusual use of statute, the tenant succeeded, in a preliminary issue in 1954 Act lease renewal proceedings, in its claim that the proposed use clause contravened the Act as being anti-competitive, and did not fall within any relevant exemption.

Though only at County Court level, and with inadequacies in the evidence supplied and a lack of detailed competition law argument, it remains to be seen if retail tenants seek to use this decision in taking issue with landlords’ tenant mix policies, in negotiation for broader use clauses (not just in the renewal context).

This summary analyses the decision in greater depth.

Case: Martin Retail Group Limited v Crawley Borough Council [2013] WL 7090797

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