ARE YOU GREEN?

  

 

I think it safe to say environmental issues and sustainability are close to the heart of the political agenda.

 

Over the past 5 years we’ve seen legislation and guidelines introduced to encourage, implement and focus our awareness on driving down greenhouse gas emissions and creating an energy-efficient environment. The Waste Electrical and Electronic Equipment Regulations 2006, the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007, the Planning and Energy Act 2008 and even the Companies Act 2006 despite differing in their own way have the same aim and purpose in sight.

 

The Climate Change Act 2008 aims to target an 80% reduction in greenhouse gas by 2050. Buildings are responsible for half of all greenhouse gas emissions in the Country and it is therefore imperative that the energy efficiency of buildings be improved. The Energy Performance Certificate (“EPC”) is arguably the biggest introduction land owners have seen to date and is generally required when a land owner sells or leases its interest in their property to another.

 

Whilst Landlords may associate “cost, delay and inconvenience” with the need to provide an EPC, I believe it provides accurate, simple, detailed information and recommendations to land owners on to how to make energy and cost efficient changes. If information such as that displayed on the EPC is not to hand the energy rating of a building cannot be improved and as a natural result rates and expenses cannot be reduced. Ultimately, we all wish to reduce outgoings in respect of a property whether it is residential, commercial, short or long term.

 

Kim Dalton of The Insurance Partnership can provide an energy assessment of both residential and commercial premises whether it be required by statute, for your own information or for cost saving purposes. 

 

I write on behalf of the commercial property team at Sandersons Solicitors and proudly state we actively seek to place responsibility, where possible and appropriate, on Tenants of commercial premises to “go green”. 

 

Whilst I appreciate “its not easy being green” I feel it important to look to the future to protect Landlords of any type of commercial premises entering into a lease for a considerable period of time. Green clauses should be inserted into Leases of commercial premises requiring the Tenant to co-operate and work with Landlords to develop and improve the sustainability of buildings, maximise energy savings creating a cost effective and energy efficient space. Failure to be up to date and foresee changes in legislation may result in practical problems when we are all eventually obliged to step up to the mark and focus our attention on environmental issues.

 

Green clauses should extend to include:

 

  • Co-operation between parties in relation to energy consumption and waste generation.

  • Data sharing on a confidential basis.

  • Restrictions on the Tenant’s alterations and Landlord’s works; both parties working together to minimise adverse effects on the alterations on an existing EPC.

  • Flexibility between the parties to perform pre-agreed energy saving works.

  • Reinstatement and dilapidations – provision for the removal of any tenant alterations that may cause unnecessary waste.

  •  Imposing energy saving targets on Landlords, Tenants or both with potential rent adjustments to reward good performance or penalise bad performance.

  • Service Charge adjustments to reflect the use of energy and co-operation if applicable.

 

There is nothing to hinder or prevent Landlords and Tenants taking steps together to become green voluntarily. Whilst I appreciate the cost of constructing or renovating a green building is initially more expensive, looking to the future, operating costs should be reduced. An energy efficient premise should preserve its value. A longer leaseholder may receive greater benefits that a short leaseholder who may not be around to benefit from the same long-term impact of environmental policies. Having said that, any Tenant may be more inclined to lease a green premise with cheaper running costs - we all want to save on outlay whether it be long or short term!

 

Support for green leases is growing. As momentum builds green leases will be accepted by Landlords and Tenants allowing us to look to an ideal “green” future.

 

If you would like to discuss any of the issues contained in this article or you wish to take the lead in respect of your commercial premises and include provisions relating to environmental issues then please feel free to contact the office.  Contact the writer Heather Midwinter - hmidwinter@sandersonssolicitors.co.uk

 

Tel:       01482 324662

Fax:      01482 223110

 

 Source:  Humber & District Landlords Association, April 2010

             Federation of Small Businesses, April 2010