Keep Tenants from Introducing Topless Entertainment

One thing to look out for when leasing to bars, restaurants, nightclubs, and other entertainment establishments is unanticipated—and unwanted—use changes after the business opens. Such changes may include the introduction of topless dancing. Needless to say, this is the kind of thing that can raise a firestorm of objections from not only other tenants, but also local residents and government authorities. So, you want to make sure your lease protects you in case an entertainment tenant tries to go to a topless format.

Problem: Leases May Not Cover Toplessness

Clauses purporting to ban tenants from using the premises for adult entertainment are a standard part of boilerplate entertainment establishment leases. Unfortunately, because of the way they’re worded, these clauses may prove ineffective against topless entertainment. Explanation: Because landlords draft the lease, courts read them strictly and may seize on any ambiguity to rule in a tenant’s favor.

A case in point was a New York lease allowing a tenant to use the space as “a restaurant with waitress service” but banning “nude or semi-nude live performances.” When the landlord discovered that a restaurant had hired topless dancers to perform in the space, it sued the tenant for violating the lease ban on “semi-nude performances.” But instead of the easy win it was probably expecting, the court handed the landlord an unpleasant surprise. The lease didn’t define “semi-nude.” And without a clear definition, the term was ambiguous. How much must a dancer wear to avoid being considered semi-nude, the court asked. Is there any difference in the application of the term “semi-nude” to female and male dancers? Since the lease didn’t provide clear answers to these questions, the court refused to stop the tenant from introducing topless dancing [MinexCorp. v. Shenanigans of Manhattan, Inc.].

Solution: Impose Clear Ban on Topless Entertainment

To avoid a similar outcome, ensure that the lease bans on topless entertainment are clear and unambiguous. There are two basic options:

1. Ban all live entertainment. The first thing you can do is take a hardball approach and ban any live entertainment by adding language like the following to the Prohibited Uses section of your lease:

Model Lease Language

Under no circumstances shall any live entertainment, including without limitation, dancing, acting, singing, or performing of any kind, be conducted at or permitted in the Premises.

2. Incorporate definition from local law. If a tenant refuses to accept a blanket ban, you may have to spell out prohibitions on specific kinds of entertainment activities. A good source for clear and authoritative specifications of prohibited uses are your state and local laws, including obscene entertainment banned by zoning laws and restrictions on types of entertainment and nudity permitted in establishments with liquor licenses contained in state licensing laws. The model language below, which comes from the New York alcoholic beverage control laws, could be easily adapted for a lease in that state.

Model Lease Language

No retail licensee for on-premises consumption shall suffer or permit any person to appear on licensed premises in such manner or attire as to expose to view any portion of the pubic area, anus, vulva, or genitals, or any simulation thereof, nor shall suffer or permit any female to appear on licensed premises in such manner or attire as to expose to view any portion of the areola, or any simulation thereof.

Talk to your attorney about adapting the laws of your state if your property isn’t located in New York.

Close the Non-Entertainment Loophole

Last but not least, recognize that bans on “entertainment” as in Option 1 above may not prevent a tenant from bringing in topless or scantily clad waitresses and other personnel. The Option 2 language should work because its ban on topless, nude, and scandalous clothing applies to appearing rather than performing within the premises. To reinforce that ban (or close the non-entertainment-related loophole created by Option 1), you can add language giving you the right to veto objectionable dress by the tenant’s employees.

Model Lease Language

Tenant hereby covenants and agrees that, throughout the Lease term, the deportment and appearance of all personnel employed or working in the Premises shall meet with Landlord’s prior written approval and, if at any time Landlord disapproves such deportment and appearance, Tenant shall eliminate the grounds for such disapproval in such manner and within such time as Landlord specifies in a written notice that Landlord provides to Tenant. Tenant’s failure to comply fully with the above provisions shall be deemed a material default by Tenant entitling Landlord to the same rights and remedies as if such default were with respect to rent originally reserved under the Lease.