What is Exclusive Use Clause?

Definition

An exclusive use clause grants a tenant the exclusive right to operate a specific type of business within the property — for example, the sole right to operate a coffee shop, pharmacy, or fitness center. Violations of exclusive use clauses can give the affected tenant remedies including rent reduction, lease termination, or damages. While exclusive use clauses do not directly affect CAM calculations, they have indirect financial implications: if a tenant exercises a remedy that reduces their rent or triggers a lease termination, the resulting vacancy affects the building's occupancy rate, gross-up calculations, and pro-rata share denominators. Property controllers should be aware of exclusive use provisions when onboarding new tenants whose business type might create conflicts.