Article Abstract:
Landlords of shopping centres may wish to have similar retail outlets competing with each other to encourage custom although they also want to offer customers a good variety of different outlets. Tenants may argue that other tenants offer unfair competition and the landlord has a liability not to allow incompatible businesses within the centre. Covenants with existing tenants may restrict landlords' ability to find tenants in the future. The UK courts found that a landlord should not have allowed a second bank in an adjoining building to an existing bank.
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Article Abstract:
There are a number of difficulties associated with current approaches to shopping centre management in the UK. Tenants tend not to realize that they must pay reasonably high rents in order to secure high standards of management, while managers have few incentives to perform their job well. It may be appropriate to consider introducing a different form of lease, shifting to rents that include a service charge. This would prompt tenants to focus on the highest quality service, rather than on the lowest service charge.
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Article Abstract:
Retailers operating outlets in shopping centres in the UK are usually required to contribute to a wide range of services. There is no legal protection for retailers from unreasonable service charge levels, and service charges are set simply through negotiation between the tenant and the landlord. It is therefore vital that retailers ensure that protection against excessive charges is included within the original lease.
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