Glossary
Legal & Compliance
Most-Favored-Nations Clause
A clause guaranteeing a tenant terms, such as rent, CAM definition, or concessions, no less favorable than what the landlord gives comparable tenants in the same property.
Firm impact
Firms can use this clause as a benchmarking tool, requesting comparable tenant lease terms to test whether a client's CAM definition or cap is actually the best deal available in the building.
How this gets abused
An anchor tenant negotiates an exclusion for major capital costs from the CAM pool. A smaller tenant with a most-favored-nations clause never requests the comparable lease terms and keeps absorbing capital costs the anchor was excused from.
Practitioner note
When a client's lease includes this clause, request comparable lease terms in writing under the clause before finalizing your findings. The benchmark itself can be a separate recovery lever alongside the CAM audit.
Related terms
FAQ
Questions about most-favored-nations clause
How does a most-favored-nations clause help a CAM audit?
It gives your client the right to request comparable lease terms in writing. If another tenant got a better CAM definition or cap, your client may be entitled to the same terms.
Do most-favored-nations clauses appear in most commercial leases?
No, they're more common for larger or more sophisticated tenants who negotiated for them at signing. Check the lease directly rather than assuming the protection exists.
You know the term. Now check the math.
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