Exempt Existing Tenants from Height Restrictions

September 30, 2005

If a tenant is constructing an outparcel at your shopping center, it may demand that you bar all other tenants at your center from building any structures that could block its visibility or view. But if you give in to this demand, your lease may have a loophole that could hurt you.

If a tenant is constructing an outparcel at your shopping center, it may demand that you bar all other tenants at your center from building any structures that could block its visibility or view. But if you give in to this demand, your lease may have a loophole that could hurt you.

What's the loophole? The lease sets height restrictions without excluding existing tenants' current or future construction. So, an existing tenant may later decide to build a structure on its store that violates the height restriction in the outparcel's lease. And if you try to cure—that is, fix—the violation, you may find yourself battling the existing tenant. It may refuse to remove or alter the offending structure because its lease doesn't require it to do so. If it does agree to remove or alter the offending structure, it may demand that you pay all removal or alteration costs.

Narrow Reach of Height Restrictions

To plug this loophole and avoid battles with your existing tenants, Ohio attorneys Jennifer R. Weily and Camilla Titterington recommend that you say in the outparcel's lease that the height restrictions won't apply to any of the following:

  • Any construction already started;

  • Any construction plans already approved; and

  • Any existing tenant, its successors, assigns, and replacements, whose lease doesn't place any height restrictions on its construction of a building or structure.

This way, the outparcel gets its height restrictions, but you'll have limited them primarily to future tenants, says Titterington. You won't have to worry about future or current construction by your existing tenants, says Weily.

Add Lease Language

To plug this loophole, add the following language to the outparcel's lease where it discusses the height restriction, say Weily and Titterington:

Model Lease Language

Any height restrictions contained herein shall not apply to:

(i) Any construction in the Center commenced as of the date hereof;

(ii) Any construction plans approved by Landlord as of the date hereof; or

(iii) Any existing tenant or any of its successors, assigns, or replacements whose lease, as of the date of this Lease, does not place any height restrictions on the tenant's construction of a building or structure.

CLLI Sources

Camilla Titterington, Esq.: camilla-titterington@yahoo.com.

Jennifer R. Weily, Esq.: Waxman Blumenthal, LLC, 29225 Chagrin Blvd., Ste. 350, Cleveland, OH 44122; (216) 514-9400; jweily@waxmanblumenthal.com.

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