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Co-Tenancy Clause
A commercial lease clause granting rent reductions or termination rights if anchor tenants vacate or center occupancy falls below agreed levels.
A Co-Tenancy Clause is a commercial retail lease provision conditioning a tenant's rental obligations or lease commencement upon specific key anchor tenants operating or shopping center occupancy meeting agreed minimum thresholds (e.g., 70%).
If an anchor closes or overall center occupancy falls below the negotiated threshold, the co-tenancy clause permits remaining tenants to pay reduced substitute rent or terminate their leases.
Frequently Asked Questions
What triggers a commercial co-tenancy clause violation?
A co-tenancy violation triggers when an anchor tenant vacates or building-wide retail occupancy drops below an agreed threshold (e.g., 70%), allowing inline tenants rent reductions or termination rights.
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