Historically, landlords and investors have been reluctant to incur capital costs to improve energy efficiency and sustainability of commercial buildings where they have little or no rights to recover those costs through the service charge and where the financial benefit is perceived to assist tenants only.
However, with increasing pressure from the Government on property owners to consider the energy efficiency of commercial buildings and to put in place good environmental practices, ‘Green Leases’ look set to be firmly on the UK property agenda, particularly for businesses with a commitment to sustainability.
At the moment the initiative is being driven out of London by The Green 500 (a programme targeting occupiers of commercial property to improve their sustainability and carbon footprint) and the Better Building Partnership a group of leading property owners and the London Development Agency. Their aim is to develop solutions to improve the sustainability of London’s existing commercial building stock and achieve substantial CO2 savings in support of the Mayor’s target of 60 per cent by 2025.
A ‘Green Lease’ is a lease which within its terms, or in an attached schedule, includes mutual contractual obligations on the landlord and tenant to encourage more sustainable environmental behaviour.
Energy efficiency – imposing an obligation on both landlords and tenants to operate in an energy-efficient manner.
Clearly the issues will differ according to the type of property (new build or refurbishment) and the environmental policies of the landlord or tenant. The following clauses are examples of those that could be negotiated and tailored to the individual needs of the property and to reflect the intentions and financial commitments of the parties involved:
There are other benefits for the landlord, such as: Improving the Value & rent ability of their properties, the tenant tends to stay longer & properties rent quicker due to lower running costs, they can re-claim the Cost of Energy Efficient Measures.
Hattons Solicitors specialise in no win no fee compensation claims and are experts in all aspects of commercial law including employment litigation .
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