Competition protection
Those who are commercially active and invest in renting space do not want to have direct competitors in the same property. It is therefore important to stipulate this in the contract.
Being in the immediate vicinity of competitors from the same industry can not only threaten the existence of many businesses, it is often fatal. However, it is not only tenants who are interested in having a "unique selling point"; landlords also want to avoid frequent fluctuations in their properties due to competitive situations. Competition protection can be agreed in the lease agreement for both the property in question and any property directly adjacent to it. Of course, both properties must be owned by the same owner.
As a general rule, if the lease agreement does not contain a precisely defined clause on competition protection, a so-called contractual protection clause applies. This means that tenants can insist that the core product range (the first 20 percent of all items sold in terms of turnover) is protected. If, for example, a second beverage store is rented in the same building, this clearly constitutes a breach of the contractual protection against competition. However, if a kiosk also has a shelf with beverages, the beverage retailer is not harmed in its core business.
It is clear that clear agreements must be made, as both landlords and tenants benefit from each other. It is helpful to clearly specify the use of the rented property in the lease agreement. Landlords are interested in seeing the space flourish. Only then can it be rented out well in the long term and the value of the property remain stable or even increase.
Permits for use
Depending on the industry and use, structural requirements must be met. Two different agreements can be made in the contract:
- The landlord ensures that the rental property is legally permitted and approved for use. The landlord must maintain the conditions required for this throughout the entire rental period.
- The landlord is solely responsible for ensuring that the rental property is approved for commercial use under building law. The tenant is responsible for creating the conditions for their respective business. The tenant is responsible for fulfilling the requirements under public law.
A tip: Before renting, check with the relevant building authority to find out what use is permitted and what requirements must be met.
