A green lease is a standard commercial lease that includes green leases clauses. Put simply, these clauses state how a landlord and his tenant will commit to good environmental practice.
What in Included in a Green Lease?
There are different types of green lease to suit individual situations, with varying shades of green which reflect the extent of the obligations involved. The specific clauses will, therefore, vary in each case. However, no matter what the conditions, all green leases should focus on helping to promote energy efficiency, as well as reducing waste products and harmful emissions.
For the landlord, green lease responsibilities may include:-
* Ensuring building and systems function with maximum efficiency;
* Eliminating CFCs in air-conditioning systems;
* Providing recycling facilities;
* Providing bike storage and changing facilities.
For the tenant, green leases responsibilities may include:-
* Using recyclable materials;
* Monitoring energy consumption;
* Using natural ventilation and light.
It is worth remembering, however, that once written into the lease, both landlord and tenant must comply with their green leases obligations. Therefore it is well worth seeking expert advice before agreeing to the terms of a green lease. Otherwise either party may find their contractual obligations difficult to meet.
How Common Are Green Leases?
Green leases are not currently widespread, but numbers are increasing, with experts anticipating a significant rise in popularity over the next 5-10 years. This growth is part of a movement throughout the business world, which is becoming more and more focussed upon maintaining good environmental practice.
Across the country, businesses large and small are taking steps to be more environmentally friendly, a development known as 'corporate social responsibility' or CSR. Although green leases are not yet legally required, there are some such measures which have already been enforced. For example, since 2009 all conditioned commercial premises over 50m² must have an Energy Performance Certificate (EPC) when sold, let, modified or constructed. This helps landlords and tenants alike know just how energy efficient a building is.
Therefore green leases are not a legal obligation, but they can help to encourage landlords and tenants to focus upon good environmental practice. What's more, they can make good business sense, as they present the following benefits:-
* Saving costs for tenants;
* Creating a better investment for owners;
* Making the premises easier to sublet or assign;
* Promoting a business' green credentials.
If you would like to discuss green leases further, speak to a solicitor; whether you need more information, would like green clauses to be considered during lease drafting, or would like to discover the risks and advantages of green leases.
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