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<p class="MsoNormal"><span style="color:#1F497D">I don't have a draft covenant but I know these are standard clauses in a lot of mall leases--typically each tenant (and especially an anchor tenant) wants to make sure a competitor doesn't move in. I think this
would be structured as a covenant between the two parcels, and it's enforceable. Requires the usual bells and whistles for a real covenant--full legal descriptions, notary acknowledgments, etc. It's usually best to have a separate clause expressly allowing
injunction as a remedy without necessity of posting bond.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">I agree that it probably is better characterized as a use restriction, rather than a noncompete, though obviously it has a strong relationship to a noncompete agreement.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Sample from a litigated case in Illinois, upholding reasonableness of a similar restriction:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D">Landlord covenants and agrees, from and after the date hereof and so long as this lease shall be in effect, not to lease, rent, occupy, or suffer or permit to be occupied, any part of
the Shopping Center premises or any other premises owned or controlled, directly or indirectly, either by Landlord, its successors, heirs, or assigns, or Landlord's principal owners, stockholders, directors, or officers or their assignees (hereinafter called
Owners), which are within one mile of the Shopping Center premises for the purpose of conducting therein or for use as, a food store or a food department or for the storage or sale for off-premises consumption of groceries, meats produce, dairy products, or
bakery products, or any of them; and further, that if Landlord or owners own any land, or hereinafter during the term of this lease Landlord or Owners acquire any land within such distance of the Shopping Center, neither will convey the same without imposing
thereon a restriction to secure compliance with the terms of this lease. - See more at: http://www.ccim.com/cire-magazine/articles/restrictive-covenants-commercial-leases#sthash.BkPA6XJj.dpuf<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><u><span style="font-size:12.0pt;color:#1F497D">National Super Markets, Inc., v. Magna Trust Co.</span></u><span style="font-size:12.0pt;color:#1F497D">, 212 Ill. App. 3d 358; 570 N.E. 2d 1191 [1991].<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D"><a href="http://www.ccim.com/cire-magazine/articles/restrictive-covenants-commercial-leases">http://www.ccim.com/cire-magazine/articles/restrictive-covenants-commercial-leases</a><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Sincerely,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Eric<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Eric C. Nelsen<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">SAYRE LAW OFFICES, PLLC<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">1320 University St<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Seattle WA 98101-2837<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">phone 206-625-0092<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">fax 206-625-9040<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Paul Neumiller<br>
<b>Sent:</b> Thursday, June 25, 2015 2:49 PM<br>
<b>To:</b> wsbarp@lists.wsbarppt.com<br>
<b>Subject:</b> [WSBARP] Covenant Not to Compete (?) and Sale of Building<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Listmates: A issue has come up that I don’t have time to research (parties want to close escrow next week, of course) and I was hoping someone might be able to give me guidance. Client owns two adjacent commercial buildings and is selling
one. Client has a toy business in the building that Client is retaining. Parties have agreed that for as long as there is a continuous operating toy business in the retained building that buyer will allow a toy business in the building that buyer is purchasing.
Is this legally enforceable? Maybe this shouldn’t be called a covenant not to compete but rather a private parties’ use restriction? Sample provisions to insert? Thanks<o:p></o:p></p>
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