Restriction on tenant’s use was unlawful

By Sarah Moore and Nick Wood

A proposed restriction on a tenant’s use of its property has been struck down as void under competition law (Martin Retail Group Ltd v Crawley Borough Council). This is the first reported case on how competition law applies to a user covenant in a lease.

In this case, the tenant was Martin Retail Group, which operated a newsagent in a parade of shops in Crawley, Sussex. The parade was in the centre of a housing estate and both the parade and the majority of the houses on the estate were owned by Crawley Borough Council.

The dispute between Martin’s and the council arose when Martin’s wanted to renew its lease under the Landlord and Tenant Act 1954. Martin’s wanted to expand the user clause in its lease, to enable it to sell alcohol and convenience goods. The council objected to this and proposed a clause that expressly excluded the sale of alcohol, grocery and convenience goods…

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