Give Revocable License Only for Tenant's Patio Service

Nowadays, many restaurant tenants ask to use common areas next to their space as a patio area, where they can place tables and chairs, and serve food. These patio areas are cropping up all over—even in shopping centers. But if you allow the restaurant tenant to use part of your common areas as a patio area, make sure that your lease properly protects you. Otherwise, you could have trouble down the line. For example, you could end up in a dispute with the tenant if the patio area hampers the flow of pedestrian traffic into and out of your building or center.

Control Use of Outdoor Area

Give your restaurant tenant a “revocable license” only to operate in the patio area. Because it's “revocable,” you can take back permission to use the patio area, at your discretion. And because it's a “license,” the tenant doesn't get a “leasehold interest” in the patio area, so you can take the patio area back quickly, with minimal notice.

Ask your attorney about using this Model Language to give the tenant a revocable license to use the patio area and require it to comply with all legal requirements.

Model Lease Language

So long as federal, state, and local laws, codes, zoning restrictions, ordinances, regulations, and safety requirements permit, Landlord agrees that Tenant shall have, at such time during the Lease Term as Landlord shall designate, a revocable license to use the area adjacent to and immediately outside of the Premises, as described on Exhibit [insert #] attached hereto (the “Patio Area”), subject to modification by Landlord from time to time as required to comply with such laws, codes, restrictions, ordinances, regulations, or safety requirements, solely for the uses permitted by Clause [insert # of use clause] of this Lease (except for the cooking of food).

You'll especially want a right to revoke the license in case the tenant's use of the patio area later creates problems—such as security risks, offensive odors, or if the patio area's appearance deteriorates. This Model Language will allow revocation of the tenant's license at your discretion.

Model Lease Language

Notwithstanding anything herein to the contrary, Landlord shall be entitled, in its sole and absolute discretion, to revoke Tenant's license to use the Patio Area, upon [insert #, e.g., 20] days' prior written notice to Tenant and to remove Tenant therefrom.

Also, remind the tenant that all sales and revenues it generates in the patio area will be considered part of its gross sales when determining the tenant's percentage rent.

Model Lease Language

It is understood and agreed that all sales and revenues derived from services performed and sales made in the Patio Area shall be included in Gross Sales for the purpose of determining Tenant's Percentage Rent payable under Clause [insert #] of this Lease.