Lees Solicitors - The growing trend for Green leases - Ian MacGregor

Commercial Property News

The growing trend for Green leases - Ian MacGregor


The growing trend for Green leases - Ian MacGregor

Basically, a green lease is a series of provisions within, or supplemental to a lease of commercial property, that encourages or requires the parties to reduce the environmental impact of the premises.

There is no standard green lease and indeed green lease provisions need not even be in the lease itself. It seems that as the concept develops the format in which green provisions are most acceptable to tenants is within a Memorandum of Understanding that is associated with the lease.

It may be more helpful to think about a range of documents or provisions which contribute to improving the sustainability of a building.

Green leases have been developing internationally for a while and since September 2006, government agencies in Australia must include a Green Lease Schedule (GLS) in leases of office buildings over 2,000 m2, of 2 years or more. A GLS is a legally binding part of the lease and there are various types of GLS which contain five standard clauses relating to:

  • energy efficiency rating
  • separate metering
  • an Energy Management Plan
  • a building management committee
  • dispute resolution procedures.

The Australian Government intends that the Green Lease Schedule be implemented voluntarily in the private commercial property market.

In the UK there is no legal requirement for green lease clauses to be used in the private or public sectors, but up to now the lead has been taken by the private sector.

Some organisations have produced guidance papers and suggested drafting for green leases, including:

  • Centre for Research in the Built Environment (CRiBE), which has published a three-part Cardiff Good Practice Guide - Incorporating Environmental Best Practice into Commercial Tenant Lease Agreements.
  • The Better Buildings Partnership (BBF), which has published a Green Lease Toolkit.
  • The BPF, which has published briefing notes on green issues to supplement its Code for Leasing Business Premises.

If you are a landlord or a tenant of commercial property and would like to explore the possibility of including green provisions in your leases please contact the Business & Property Services Department of Lees Solicitors LLP.

Ian MacGregor

 

This article provides a summary of a recent news item. It is intended for general information purposes only and is not to be relied upon. It does not constitute legal advice and should not be treated under any circumstances as a substitute for legal advice. Lees Solicitors LLP does not accept any responsibility for any loss that may arise from reliance upon the information contained within this article. The copyright in this article is owned by Lees Solicitors LLP and permission must be sought before reproduction or publishing.


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