United Kingdom

Green leases are developing quickly in the United Kingdom.  In 2007, a Good Practice Guide1 was published by CRiBE in Cardiff University.  The Guide gives example clauses which could be incorporated in a lease or schedule.  The aim of this work is to encourage landlords and tenants to discuss the various clauses and pick those most appropriate for their circumstances.  The following topics are covered:

• New tenancy
• Renting premises
• Obtaining professional advice
• Financial matters
• Duration of lease
• Rent and VAT
• Service charge
• Repairs and service
• Assigning and sub letting
• Alterations and changes of use
• Ongoing tenancy
• General communication
• Request for consents
• Release of landlord on sale of property
• Repairs
• Business rates
• Service charges

This guide was written to accommodate multi-occupancy buildings. 

The same team have been running a research project “Sustainable Environmental Improvements in the Commercial Sector (SEnvICS) in Newport, South Wales since 2006.  The project has supplied support and training to landlords and tenants interested in green leases.  This has resulted in landlords investigating how they can proceed with green leases in a variety of multi-let buildings.  Developments and case studies from this project can be found on the website http://www.greenleases-uk.com/senvics.php .  

WSP have also developed a green lease guide2.  This is in the form of a checklist which can be used to indicate which environmental technologies and practices are used in the building, and who is responsible for them.

Hermes (a founder member of the Better Buildings Partnership), Exemplar Properties and Philips Research are the first companies in the UK to publicise the implementation of a green lease.  Hermes has stated that it hopes to announce leases with other clients shortly3,4.  This lease includes the following clauses: 

• Sustainability and EPC - Not to do or omit to do anything which adversely affects
• the EPC rating for the Property or
• the energy efficiency environmental performance or characteristics of the Property
• so far as practicable to use materials from sustainable sources and to treat and maintain all materials fully in accordance with manufacturer's instructions and recommendations
• to comply so far as practicable with the Owner's then current policy relating to responsible property investment
• The Owner and the Occupier shall each co-operate with the other
• by the Occupier providing whatever information the Owner reasonably requires relating to the energy and water consumption and waste management statistics for the Property and for the Owner providing whatever information the Occupier reasonably requires relating to such statistics for the Common Parts
• in a reasonable manner in respect of any energy saving or carbon reduction initiative that the owner may choose to implement in relation to the Retail Park or that the occupier may choose to implement (but not so as to breach any of the Occupier's Covenants) in relation to its use of the Property
• [tenants have the right] to install photo voltaic cells or panels or any other sustainable energy equipment ("the Equipment") on the roof of the Property

Information is also available from law firms (e.g. DLA Piper5, Pinsent Masons6 and Nabarro’s7) which provide more of a commercial view on UK green leases.

A further resource to assist landlords and tenants in improving the energy efficiency of commercial buildings is www.LES-TER.org.  The Landlords Energy Statement (LES) is a free tool which helps the landlord establish the energy / CO2 requirement of providing communal services in the buildings and helps compare them against similar buildings with similar uses.  It also identifies areas for improvements, and can be used to illustrate year on year improvements.  The Tenants Energy Review (TER) which will be available on the site shortly helps tenants to quantify tenants direct energy use and identify occupancy features which influence energy demand.  It also helps the tenant identify opportunities for improvement, sometimes in co-operation with the landlord.  The TER in conjunction with the LES also helps collate the information required for a Display Energy Certificate.

1. Langley, A. and V. Stevenson, Incorporating Environmental Best Practice into Commercial Tenant Lease Agreements: Good Practice Guide - Part 1. 2007, Cardiff: Welsh School of Architecture.
   
2. Symons, D. and S. Williams, The Green Lease Guide. 2007, WSP Environmental,
   Boodle Hatfield: London.
   
3. Jansen, M., Hermes lays down green lease gauntlet, in Property Week. 4th April 2008. p. 70.
   
   
4. Jansen, M., Degrees of indifference, in Property Week Sustainability Supplement. 2nd May 2008. p. 4-5.
   
5. Jayson, P. Green leases - barriers or green hurdles? A Lawyer's perspective in Don't Forget Your Greens. 2008. Newport, UK.
   
6. The Pinsent Masons' Sustainability Toolkit Series: Part 3 - The Development of Green Leases. 2007, Pinsent Masons.
   
7. Lust, G., Green Leases. Insight (Property Week Supplement), 23rd November 2007: p. 63.

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