SPECIFIER USER CLAUSE

The rental value is linked to the use to which the property is likely to be put, either restricted by covenants of the lease, the lease purpose clause (Canberra) and or planning restrictions. A potentially onerous situation is one where there is an absolute prohibition on user clause. Further, particular problems arise where the use referred to is unique to the subject tenant. Such clauses can have an important effect on rental value (Horwitz Grahame Books case, The Valuer, November, 1990, p281) but may run counter to the Trade Practices Act.

The specifier user clause can also be positive. For example, where it protects a tenant in a planned shopping centre from competition.