SUSTAINABILITY PART 3
THE EMPHASIS ON ‘GREEN’ Green leases have gained increasing prominence in the last few years, driven by policy and legislation, such as The Energy Performance of Buildings Directive (EPBD). The EPBD led to the requirement for Energy Performance Certificates (EPCs). These certificates are based on the energy efficiency of a building and are required by law when buildings are sold, let or renovated. EPCs give the equivalent of a ‘fridge rating’ for buildings to indicate their energy efficiency and level of carbon emissions. Other key drivers for the adoption of
green leases include risk mitigation against rising energy, water and landfill taxed. Increasingly, acting to protect one’s company’s reputational risk, and maximising the CSR opportunities of a robust environmental and sustainability management policy are compelling business reasons for engagement with the agenda and a buy into the notion of green leases for landlords and tenants. At a time of global austerity and
constricted resources, however, the additional burden and cost of adapting and implementing the requirements of a green lease can appear onerous, especially on the tenant. To assist parties to meet the
occupiers can agree appropriate arrangements to best fit with the circumstances of individual properties. A model Memorandum of
Understanding which can be used in full or in part and which parties can enter into at any stage of a lease. Model Form Green Lease Clauses that
the BBP believes should be included in new and renewal leases as a minimum as best practice. The extent to which these clauses are used will depend on the parties’ ambitions and what is appropriate for individual circumstances. The green leases message it seems is
getting through – and being acted upon. Mat Lown, partner at Tuffin Ferraby Taylor (TFT), “In a recent survey, 81 per cent of investors and landlords feel that they will need the full co-operation of their tenants before implementing any form of green lease, with every tenant agreeing that they would need to work together with their landlord. In a similar vein, over half of both parties believe that the costs of implementing sustainability measures should be shared between those who own the building and those who occupy it.” There is less consensus, however, as to the commercial consequences of
Over 50% of landlords and tenants believe the cost of sustainability measures should be shared between them.’
challenge the Better Buildings Partnership (BBP) has produced a toolkit for green leases to enable owners and occupiers of commercial buildings to work together to reduce the environmental impact of their buildings.
GREEN STRATEGIES The guidelines are intended to be non- prescriptive, helping owners and occupiers to agree carbon, energy, waste and water reduction strategies which best fit with the circumstances of individual properties. The toolkit is intended to assist any owner or occupier to positively engage in developing practical ways to effect significant change, with the hope to accelerate the process of making existing commercial properties more sustainable. The toolkit can be downloaded at http://
tinyurl.com/d5f2ct4 The toolkit includes the following: Non-prescriptive best practice
recommendations by which, through a partnership approach, owners and
increasing a property’s sustainability credentials. The TFT survey founds there is an even split between those who believe that a more sustainable building will result in a higher property value to those who expect no rise. Only 11 per cent of commercial property
owners believe that they would be able to gain any extra income from a more sustainable building, however, 39 per cent expect there to be a reduced tax burden. Lown said, “There is also a fear that a
tenant’s green requirements will result in increased costs to the landlord under repair and refurbishment contracts. Financial implications are fuelling anxiety from tenants towards green leases, with the vast majority worried that they will bear the brunt of the bigger financial responsibilities that going green would create. However, an area where they do not
expect to see any financial implications is rental costs, with only 21 per cent thinking that they will see rents increase.”
PROPERTYdrum MARCH 2012 19
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