Use Clauses And Exclusive Uses – Tips For Landlords In Retail Shopping Centres

Landlords are often faced with requests from prospective tenants for a broad use clause or "exclusive" use protection in their leases.  With an increasing number of tenants that offer similar merchandise or services, landlords must be alert to the dangers of promising tenants too general of a use clause that could conflict with the exclusive use of current tenants or impede on their ability to attract future tenants.

A recent case from the Ontario Superior Court of Justice, 2249778 Ontario Inc. v. Smith, dealt with a tenant operating as a fast food restaurant who also had an ATM installed in the premises. The landlord objected to the ATM on the grounds that the tenant was offering "banking services" which were not included as a permitted use under the lease.  The tenant argued that the ATM was a tool which facilitated his business by lowering his costs and providing convenience for customers.  The court ultimately sided with the tenant, concluding that the ATM was