How liable is my business landlord for colluding with my competition?
April 6th, 2011 | 
Author: I have an “exclusive ” clause in my lease that protects me from competition in certain ways which my landlord has likely “breached the good faith of”.
I have recordings of him admitting to me that my competitiors were in his office “on other business”, and he was encouraging me to revel secrets to him and them. I suspect that either he or his wife has invested in a formidible, new competitor across the street from me. Although, I cannot prove it. My business is now nearly ruined, and I blame my landlord for not honoring or arrangement, therefore putting me in a position of certain financial destruction. I can’t figure out how to prove he or his wife is an investor, without large amounts of expense. I’m nearly broke now. He and his partners are very wealthy so if there are any attorneys out there who might would take a chance on something probono, it could be a large payday. I know he revealed sensitive info, and at least was approached by my competitors for an investment.
The exclusive clause specifically states that the landlord will not rent or sell property to another fitness center on any property at this center or any surrounding properties across the street. (intrade for a lengthy,expensive lease) Although it is very specific, I would imagine that at least the lease should be severable if he violated the “spirit” of the contract and helped a competitor open directly across the street on properties not belonging to him. I’m thinking I could have grounds to sever the lease because he immediately put my ability to pay him at risk. It seems that a person should not be able to enforce a contract he deliberatley made impossible for the other person to honor.
Posted in Landlord Tenant Law
Surely your ‘exclusive’ clause does not protect you from your landlord revealing sensitive information? That would be a VERY unusual rental agreement. I am thinking that clause only prevents the landlord from renting to another client in the same business?
If you revealed sensitive information to a third party, without any sort of confidentiality agreement, you are most likely out of luck if that person passes it on. Now if he fraudulently obtained it (say by illegally entering your offices), you might have a case.
The landlord’s investment or not in the new company is sort of irrelevant.
Last but not least, you don’t say how any information you lost could have destroyed your company. For instance, if I own an office supply place, and Office Depot opens across the street from me, there is NOTHING I could reveal to them that would cause me to lose business. Rather, their higher profile, better selection, and better pricing would be my downfall.
That is the normal progression in cases like this. It’s sad, but you can’t sue anybody for it.