Use Clauses In Leases Can Be Unenforceable As Being Anti-Competitive

In the first case subjecting a permitted user clause in a lease to scrutiny under the Competition Act, a landlord local authority seeking to impose use restrictions on its tenant (to promote mixed use in a parade of shops) lost its case on the grounds that it would breach competition law by doing so and that it had not proven that the requirements for individual exemption under the Act were met

Whilst this decision may ultimately be appealed, at present the decision in Martin Retail Group Ltd v Crawley Borough Council serves as a warning that the Courts are prepared to find restrictive user covenants in land agreements to be in breach of competition law and therefore unenforceable.