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Many landlords are faced with a dilemma when signing a deal with a small tenant. What if a larger tenant wants to lease a large block of space and a smaller tenant is already leasing some of the space that the larger tenant needs? To cover this situation, many landlords require a relocation provision to be inserted into the leases it enters into with small tenants, which permits the landlord to relocate the smaller tenant to another portion of the shopping center.
On the flip side, moving a tenant to another location within the shopping center can have serious consequences for the tenant being relocated. For example, relocating a tenant into new space that is in a “dead” zone in the center can result in a huge loss in sales volume for that tenant. Seeking a proper balance between the legitimate needs of a landlord and the legitimate needs of a small tenant should be the goal of the parties who are reviewing a relocation provision.
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