Time to 'green' your leases? Revamped Green Lease Toolkit released

At the end of January 2024, the Better Buildings Partnership (“BBP”) launched its updated Green Lease Toolkit – its first revision since 2013.

What is the Green Lease Toolkit?

The Green Lease Toolkit is a free, interactive and practical tool which aims to support parties from heads of terms stage through to the drafting of their leases across different asset types to help them achieve sustainability targets and reflect the evolving legislative landscape on ‘green issues’.

Although the main part of the toolkit is the draft green lease clauses, which are available for anyone to use and incorporate in their leases, the toolkit includes other useful resources (e.g. case studies).

Green lease clauses

The toolkit includes suggested drafting that can easily be slotted into the Model Commercial Lease (the “MCL”) and Scotland’s equivalent Property Standardisation Group lease (with drafting notes to assist with this). However, the Toolkit’s clauses can also be adapted for incorporation into a party’s own standard form lease.

The suggested clauses relate to a number of key topics, with the 10 ‘Green Lease Essentials’ highlighted being:

1. Cooperation;
2. Building management / sustainability groups;
3. Sustainable use;
4. Data sharing & metering;
5. Extending landlords’ rights to do works;
6. Tenant’s alterations;
7. EPCs;
8. Waste (landlord & tenant) ;
9. Re-instatement (yield up); and
10. Renewable energy.

The Toolkit is not prescriptive in its exact drafting of the clauses but, in most cases, offers drafting options at 3 different levels: “light”, “medium” and “dark” green: 

• “light green” being clauses that a party may want to adopt when first setting out to ‘green’ its leases (and are broadly reflective of sustainability provisions in the MCL and the previous iteration of the Toolkit), and
• “medium green” and “dark green” being progressively more stringent in their requirements.

To assist parties in deciding where they would like drafting of a particular clause to fall on this sliding scale, the Toolkit includes a ‘Statement of Intent’ for each clause which sets out the overarching purpose behind it. Therefore, if particular aspects of the drafting don’t work in a particular situation, the parties can use other drafting aimed at the same outcome.

Has the balance between landlord and tenant interests been struck?

In compiling the Toolkit, a wide range of stakeholders from the across divide – landlords, tenants, solicitors and agents – were consulted with a view to achieving a balanced approach to the suggested drafting.

How the balance between parties’ interests is struck in practice will vary as the toolkit is intended to be a starting point for drafting. However, suggestions are made as to who should incur costs and how these might be allocated fairly between parties, for example.

How does it differ from the previous Toolkit?

As the previous iteration of the Toolkit was over 10 years old, there is a raft of wholesale updates and new topics addressed in this new version.

The new Toolkit is intended to be a ‘living’ resource and so will continue to be updated to reflect feedback that BBP receives and changes in legislation etc.

Updating your form of lease and resources

Should you require any assistance in navigating the Toolkit or would like to discuss how you may wish to incorporate some its clauses into your precedent, please contact your usual CMS Real Estate contact.

For more in-depth coverage of the Toolkit and how best to use it, a recording of CMS’s recent webinar on its introduction can be accessed by signing up here.