Pothecary Witham Weld Solicitors

Energy Performance Certificates (EPCs)  - How they may effect Landlords and Tenants. 

A copy of the EPC must be provided free of charge by a Landlord. However, the cost of producing the EPC may be recoverable where it is produced by a landlord for the benefit of a whole building. The Lease must be drafted in a clear manner to achieve this and a by product of the EPC regulations may be a move towards a more ‘greener’ form of lease? 

'The Green Lease' - some features?
-  contain an additional set of schedules compared to a ‘normal’ lease, imposing mutual obligations on both parties, with the aim of improving the energy efficiency of a particular building or commercial estate;
- service charge contributions between the tenants may be adjusted to reflect the achievement of specified energy efficiency targets and even be taken into account in rent reviews;
- impose an obligation on tenants to meet targets say, on recycling, and reduce energy and water usage;
- consent to proposed change of use or alterations by a tenant, may be refused by a landlord if likely to have an adverse affect on the energy efficiency of the building. 

‘The Green Lease’ has its origins in Australia, where they were introduced in September 2006 for compulsory use within the public sector, and has since been expanded (though on a voluntary basis) into the private sector. The Green Lease looks set to develop in the UK in a similar way – with high profile organisations already using green lease principles in their property transactions. Should this be the case, the Green Lease is likely to have at its core the model clauses contained in a publication entitled ‘Incorporating Environmental Best Practice into Commercial Tenant Lease Agreements – Good Practice Guide Parts 1 and 2’ (published by The Centre for Research in the Built Environment, led by Angela Langley at the Welsh School of Architecture, based at Cardiff University, published in July 2007 on the strength of 8 years of research) 

Tenants will face increased costs in complying with the terms of a green lease, hence it is something that landlords will need to promote. However given the Government is engaging in a long term strategy for sustainability, it is likely that anyone taking the lead now will see the benefits in the long term. This article is a summary only and does not constitute legal advice. Should you have any queries in connection with this summary or require advice on the proposed ‘model clauses’ for a Green Lease, please contact either : 

Ajmal Hussain (BS): Tel: 01279 506421 or via e-mail

or

John O’Connor (London) : Tel: 020 7821 8211 or via e-mail