A continuous operation clause requires the tenant to keep the leased premises open and actively conducting business during all required business hours throughout the lease term. The clause is a landlord tool designed to prevent tenants — particularly retail anchors — from paying rent while keeping the space dark, which would harm foot traffic and other tenants in the center.
By Angel Campa, Founder · Updated March 2026
In retail environments, continuous operation obligations are critically important for centers that rely on anchor tenants to draw traffic. If a major grocery store or department store pays rent but closes its doors, the center suffers significant economic harm that cannot be fully compensated by rent alone. For tenants, continuous operation clauses create legal exposure when operational challenges — such as store closures for renovation, labor disputes, or underperformance — make it commercially impractical to remain open, potentially converting operational decisions into lease defaults.
Negotiate carve-outs for commercially reasonable closures including renovations, force majeure events, casualty, and condemnation. Include a minimum hours standard tied to market norms (e.g., "hours reasonably consistent with other comparable retailers in the center") rather than fixed hours that may become operationally burdensome. Push to limit the landlord's remedy for continuous operation violations to damages rather than specific performance or termination, since courts are reluctant to compel operating businesses to remain open. If possible, delete continuous operation clauses entirely in favor of a go-dark right.
Strict continuous operation with specific required hours, continuous operation limited to anchor tenants only, continuous operation with permitted closure exceptions, and continuous operation limited to the initial term only with the right to go dark during renewal periods.
Lextract extracts these fields directly from your lease PDF when this clause is present:
Go-Dark Clause
A go-dark clause gives a tenant the contractual right to stop operating its business and cease all commercial activity at the leased premises while continuing to pay rent, without being in default of the lease.
Co-Tenancy Clause
A co-tenancy clause is a lease provision — almost exclusively found in retail leases — that gives a tenant the right to pay reduced rent or terminate the lease if certain anchor tenants or a minimum occupancy threshold in the shopping center falls below a specified level.
Exclusive Use Clause
An exclusive use clause grants the tenant the sole right to operate a specific type of business or sell particular products within the shopping center or building.
Kick-Out Clause
A kick-out clause is a lease provision that grants the tenant the right to terminate the lease early if sales revenue fails to reach a specified threshold within a defined measurement period.
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