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Legal Advice
Green Leases
How green is your leasing? Stevens & Bolton Partner Gary Grett looks at sustainability
in commercial leases in the current economic climate
I
n a difficult and declining property There is no single accepted definition yet, coming decades. In my view, green leases
market we will all have time to reflect on but ideally a green lease will be user friendly, really only apply to truly green buildings, or to
what the future might hold. embracing green principles, and will regulate a those which have been refitted/refurbished,
If sustainability and energy reduction is to building's operation, use, maintenance and and undergone a high degree of greening. For
be our focus, our buildings and our legal doc- management with a view to minimising impact existing buildings, green leases are not really
uments both need to change. All the talk now on the environment - in other words, a legal appropriate – in those circumstances what we
is of Green Leases, and the hunt is on for the framework that contributes to and encourages need is a ‘green umbrella’ under which normal
perfect green lease. SMEs should not ignore the reduction of a building’s carbon footprint. leases can operate – a Green Handbook land-
the implications of the UK and European
The challenge
lords and tenants can subscribe to, and which
energy regulations, which will have an impact has the flexibility to change as the building
on your workplaces and office space. We need green leases because existing itself changes.
It is a sobering thought that as little as 2% lease provisions cannot cope with the new Greening our existing stock of buildings will
of total property stock in the UK is currently challenges green buildings provide. Lawyers be an enormous challenge. Many people will
made up of green buildings - that is, new sometimes mistakenly try to make buildings fit be waiting to gauge the impact of Energy Per-
buildings incorporating in their design greater their standard lease, which is like trying to fit a formance Certificates on capital values and
control of energy, reduction of carbon emis- square peg into a round hole. rental levels. Perceptions have moved on to
sions, best use of natural resources (water, While precedents make good servants, embrace the green agenda, and SMEs, like
light, air, and heat), waste management and they make lousy masters. Leases need to re- the buildings they occupy, need to keep up
recycling. However, as more institutions trade flect actual structures; with a new breed of with the pace of change.
out of older buildings to buy green, the need building comes the need for a new breed of For further information please contact
for green leases has increased significantly, lease which reflects the new sustainable con- Garry at
garry.brett@stevens-bolton.co.uk
and could one day become mandatory. struction techniques to be developed over the
Business Matters issue 164 • 15
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