Case law in the European Court of Justice can be all too easy to ignore, but recent disputes have raised the application of competition law to restrictions in commercial leases. And that is something that landlords and tenants need to be aware of, according to a lawyer based in Brussels.
Writing this week in Estates Gazette, Matthew Hall, a partner at McGuireWoods, offers a vital update on recent developments in cases involving Latvia, Germany and the UK, and explains why the issues raised are important.
He says: “In some circumstances a restriction on the tenant or landlord may be unlawful under national and/or EU competition law. If unlawful, the clause is unenforceable, fines may in principle be imposed and a third party could seek to bring a damages claim.”
Hall explains the provisions involved and summarises the key findings in each of the three cases heard in the last two years, which confirm that, in certain circumstances, provisions in commercial leases that restrict the landlord or the tenant may infringe competition law.
Hall adds that the potential consequences can be very significant for commercial leases and the parties involved, and that EU and national competition law should be considered early on in the process.
He says: “Consideration must be given during contract negotiations and subsequent compliance reviews to the application of competition law to any restrictions in leases, as well as in competition compliance programmes generally. This is particularly the case where the provision in question is crucial for the value of the lease from the point of view of landlord or tenant.”
• Hall’s full article can be read in the Practice & Law section of the 13 February issue of Estates Gazette or click here to real the article on EGi.
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