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Is there any statute that specifically governs "exclusive use" clauses in commercial leases?

Montclair, CA |

Exclusive use barring the lessor from renting to another business that would compete with their current lessee? I've been searching online and I cannot find a statute that specifically permits this. Would Cal. Civ. Code §1469 apply to this scenario?

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Attorney answers 3


You are referring to a covenant not to compete. These covenants are strictly subject to agreement between the landlord and tenant, and must be expressly set forth in the lease agreement as to scope and terms. The law will not impose such a covenant. CC1469 would only apply if the landlord owned adjacent property to the rental premises, and the parties had a covenant not to compete in the lease.



Is there a statute that states this "covenant not to compete" is legally valid and enforceable ?

Richard Leigh Boyer

Richard Leigh Boyer


No. Only case law. You would review relevant case law and find cases where courts have interpreted and determined the enforceability of covenants similar to yours. The judgments in those cases would provide a reasonable prediction as to whether yours is enforceable.


Such a clause would have to be in the lease to be enforceable. Without that, the landlord could lease every unit in a building to the same type of business. Most landlords know that is not wise, as that only increases the chances that one or both of the business fail.
I do have an office in Montclair and would be happy to talk with your or review your lease agreement.


I am not surprised you cannot find a statute permitting this. the question is whether there is a statute prohibiting it. And, that would be unlikely. These clauses are entirely reasonable for the reasons mentioned by my colleagues. They help to ensure tenants that a competitor will not be moving in next door; and they lend some stability to the tenant / landlord relationship.

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