Lees Solicitors - Green Leases - Ian MacGregor

Commercial Property News

Green Leases - Ian MacGregor


Green Leases - Ian MacGregor

Most people are now actively considering how they can reduce the environmental impact of their businesses and their commercial buildings.

The Better Buildings Partnership (BBP), has published "Green Lease Toolkit: Working together to improve sustainability" (the toolkit).

BBP members will be trialling the operation of the toolkit and the BBP is inviting other companies to do the same and would welcome feedback on the toolkit.

Green Leases

A green lease is generally a standard lease with a number of additional clauses inserted that provide for enhanced environmental controls and initiatives by both landlord and tenant.

Memorandum of understanding

Another approach to a green lease is to include, in parallel with the lease, a separate memorandum of understanding requiring both landlord and tenant to comply with green obligations. This can be either voluntary or legally binding.

A memorandum of understanding tends to be a more flexible and cheaper arrangement as it can be updated to allow for the setting of targets and actions to reduce energy use without amending the lease and provides a solution to landlords and tenants who might be put off by the costs and time it may take to enter into a more formal arrangement.

Toolkit Summary
The toolkit consists of 4 sections:

  • Section 1 - how landlords and tenants should use sections 2-4 of the toolkit.
  • Section 2 - best practice recommendations.
  • Section 3 - the model memorandum of understanding.
  • Section 4 - the model green lease clauses.

Best practice recommendations

The toolkit sets out various best practice recommendations that include:

  • The sharing of data on energy and water consumption.
  • Sub-metering for individual utilities and occupiers.
  • Landlords and tenants should respond to reasonable requests from each other to co-operate on reduction of energy and water consumption and to improve recycling.
  • Regular audits of energy and water consumption, and quantifying waste generation and recycling.
  • Consideration of environmentally friendly factors when altering or replacing equipment.
  • Building occupancy should be recorded and reviewed against actual energy usage.
  • The establishment of building management committees.
  • The inclusion of sustainability initiatives in the Tenant's Handbook.
  • Landlords should try to identify costs of green initiatives in service charge reporting.
  • Landlords should consider requests for the installation of renewable energy and low-carbon technology, where possible.
  • Landlords should consider waiving reinstatement obligations where tenants' alterations have improved the environmental efficiency of the building.

The model form memorandum of understanding:

  • Covers all the best practice recommendations set out in section 2 of the toolkit.
  • Can be used in full, or in part, to incorporate the best practice recommendations.
  • Can be entered into by the parties at any stage of the lease.
  • Can be time limited. It need not run for the entire duration of the lease.


The model form green lease clauses

The model form green lease clauses are:

  • Intended for use when negotiating a new lease, or renewing a lease.
  • Can be used in conjunction with the memorandum of understanding.

The green lease toolkit is a very interesting publication and there is much in it that might be of interest to environmentally aware landlords and tenants and those keen to enhance their own corporate social responsibility.

If there are any features of the toolkit that you would lie to incorporate into your leases please contact a member of our Property Team on 0151 647 9381.

Ian MacGregor


Source
Green Lease Toolkit: Working together to improve sustainability

http://www.bitc.org.uk/resources/publications/green_lease_toolkit.html

 

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