Bringing Benefits to Business and the Environment
greening of commercial leases
Creating an effective partnership between landlords and tenants will be one of the keys to reducing carbon emissions in commercial buildings.
Most commercial leases simply don't give landlords and tenants the incentives or reassurances they need to make significant green investments in commercial buildings (click here for why not).
CCW has developed a range of green lease products specifically for the Scottish commercial property market, in order to help both landlords and tenants make green investments. Some of these consist of green “bolt-on” agreements to standard commercial leases, with landlord and tenant being able to decide for themselves the extent to which they want these agreements to be legally binding.
For an example of what landlords and tenants can agree, download the sample memorandum of agreement here. This style of agreement is intended to be:
- voluntary as between the current landlord and tenant
- a statement of intent by both landlord and tenant to adopt green-friendly physical alterations and green-friendly behaviour
CCW’s “Greening of Commercial Leases” full legal product range consists of:
For new leases of commercial buildings
We can provide landlords with suitable green leases for different commercial properties of all shapes and sizes. Green leases differ from standard commercial leases in that they provide for greater co-operation between landlord and tenant in the ongoing management of commercial buildings (for more details on green leases click here). In line with best industry practice, we offer three different types of lease to suit landlords’ particular requirements:
- light green leases – these are standard commercial leases with separate voluntary side agreements
- middle green leases – formal variations of existing commercial leases covering such clauses in the lease as the service charge, permitted alterations, co-operation procedures for data and rent reviews
- fully green leases – those include penalties for breach of green provisions
All of our standard commercial lease style documents also come "green-enabled" to allow landlords and tenants to opt in to green measures at a later date, should they wish to do so.
For existing leases of commercial buildings
It is possible to “retro-green” commercial leases. As for new leases, landlords and tenants can choose the extent to which they want to build green measures of control into their commercial leases.
1. a light green touch – landlords and tenants can voluntarily enter into non-binding measures to allow landlords and tenants to co-operate more effectively in achieving carbon emission reductions
2. middle and fully green variations of commercial lease
For tenants wanting to invest in climate control or energy efficiency measures, we can recommend the necessary changes to be made to existing commercial leases.
Impact of CRC Energy Efficiency Scheme (“CRC”) on leases
The introduction of the CRC will have a major impact on commercial leases of buildings to which the Scheme applies.
CCW can:
- advise landlords on the necessary changes to the terms of existing commercial leases, including the adoption of mini-CRC schemes to particular developments and modifications to the service charge and rent review clauses
- represent tenants either individually or as a class, on any proposed changes to commercial leases and the necessary protection tenants will need
In addition, through our Green Any Property service, users can obtain advice on:
- the cost to the landlord of purchasing CRC allowances and the landlord's administration costs incurred in connection with the CRC
- style handbooks intended to be given to tenants of commercial buildings which includes guidance on good environmental practice and a style energy management plan in relation to monitoring, improving and reviewing the environmental efficiency of the buildings