What Should You Do If A Neighboring Business Is Interfering With Yours?

Posted on: 8 September 2015

If you own a small retail business in a commercial district, your lease agreement likely lays out a significant number of covenants and restrictions. However, unless the parcels of property near your business are owned and managed by the same company that manages yours, you could find that your neighbors' leases are much less restrictive, allowing them to engage in activity prohibited by your lease that can harm your business. What are your options if you feel your rights as a business owner have been violated? Read on to learn more about the often conflict-laden world of commercial leases.

What are some common retail lease issues?

One key factor behind the rise of the "strip mall" or shopping plaza as a retail spot involved the ability of the landowner to fully control the makeup of the location. Many strip mall or other commercial leases contain provisions restricting the landlord's ability to rent to more than one similar business (to prevent two pizza places from opening up next door to each other), or requiring the tenant to maintain a portion (or pay additional rent to maintain) a common parking area. Because the commercial landlord wants all the spaces in his or her mall filled, there is some incentive to provide protections to the tenants to help them boost traffic to the area.

However, if you're renting in a business landscape where you and each of your retail neighbors report to different landlords, you could find that you're not afforded these same protections as you enjoy when renting in a shopping plaza. There may be nothing preventing a competitor from opening across the street from you and attempting to poach your customers, or even from towing your customers if they park on this business's lot (assuming sufficient notice has been posted). If you're dealing with an aggressive neighbor, this can be enough to put you out of business.

What can you do if your business is suffering due to a neighboring business's actions? 

Your first step should be to determine whether this business's actions are legal. Harassing your customers, having vehicles towed from a public street, or causing damage to your store or product can all be infractions or misdemeanors that may result in fines to the business or its employees.

If this business's actions aren't against the law, you'll then need to determine whether this business is violating its own lease. You'll likely want to consult a commercial or real estate litigator to determine whether it's likely your neighbor is committing a lease violation and, if so, how to proceed. Your attorney may contact the neighbor's landlord to report these potential violations or send a demand letter instructing the landlord to take action.

For situations in which the neighboring business is engaging in legal actions that do not violate its lease, your final recourse may be with your own landlord. Depending upon the specific language in your lease, you may have some protection against your neighbor. For example, if your lease guarantees your business access to a certain number of parking spots and your neighboring business is blocking these spots or otherwise preventing your ability to use them, your landlord may be obligated to take action.

Your landlord's failure to protect you in the ways promised by the lease may serve as sufficient cause to allow you to break your lease, letting you move your business to a new location for a fresh start without incurring termination fees or other costs. In other cases, you may choose to stay but to file a lawsuit against your landlord for violating your lease agreement. 

Check out sites like http://wfactorlaw.com for more info.