Restrictive Covenant - Commercial Covenants

Commercial Covenants

Restrictive covenants are commonly registered against commercial properties. General covenants such as those restricting the heights of structures or forbidding certain "dirty" businesses (such as feedlots or chemical production facilities) are common in industrial areas located near residential communities. Developers may seek to restrict the type of business allowed to operate in a certain area so that a purchaser of land in a research park, for example, could not turn the building into a bingo parlour or a tool and die factory. A commercial lease may include a restrictive covenant forbidding the sale of certain items, such as pornography or liquor. A powerful mall tenant (such as a major supermarket chain or other anchor store) may require its landlord to include in its leases to other tenants a restrictive covenant forbidding the sale of certain items (such as fresh meat and produce). The latter situation is more common outside the United States, and is especially seen in Canada.