Commercial property leases going green
LANDLORDS and tenants are increasingly seeing the benefit of going green and making it part of leases.
A “green lease” brings cost and corporate responsibility benefits and helps both parties meet their environment-related obligations under a range of laws and regulations inclduing the Carbon Reduction Commitment, according to law firm DWF.
Landlord and tenants can enter into a green lease as part of a commercial real estate lease and commits both sides to work together to reduce the environmental impact of the premises.
David Cowgill, real estate solicitor at DWF in Leeds, said: “Although still very much in their infancy and potentially contentious, the support for green leases from landlords and tenants is growing.
“The UK property industry is pushing for them to become the norm and it is only a matter of time before the green lease will become the accepted form of lease recognised by both landlords and tenants.
“There are numerous advantages for businesses in making the landlord and tenant relationship green either through green leases or other informal arrangements but the concept is not without its challenges. The main challenges faced are the costs involved with making a building green, the lack of business incentive as green leases are not yet the market norm, and also the lack of knowledge about what green leases entail.
The recently introduced Carbon Reduction Commitment scheme forces large organisations to buy allowances to cover their carbon dioxide emissions, organisations affected are required to purchase allowances to cover their carbon dioxide emissions.
