As retailers continue to close underperforming stores and look for other ways to cut costs in a weak economy, they are closely monitoring and enforcing co-tenancy provisions in retail leases.

The language of the lease is critical in co-tenancy disputes.  Issues that arise include:

  • What conditions trigger a tenant’s co-tenancy rights? Closure of anchor stores? Closure of stores occupying a certain percentage of the leasable space in the mall?
  • What are the remedies in the event of a co-tenancy failure? Reduced rent? Can a tenant close the store?

At the link is an article I recently co-wrote with my colleague, Jennifer Romano, discussing this issue in more detail.