One of our landlords has suggested green leases. What does this involve and what will it cost?
Your landlord cannot force you to change the terms of your lease, but is probably suggesting you both sign a ‘memorandum of understanding’, which is not necessarily legally binding.
Rix & Kay Solicitors partner David Ashton explains: “This is a voluntary way to work with your landlord to achieve a more energy-efficient property. You can both work together and set out what goals or targets you want to achieve. The document will affect you and your landlord (and not any subsequent tenant) with regard to the operation and use of the property, and it need not be expensive.”
The main issue will be: who is to be responsible for the cost of implementation? Ashton explains: “For instance, you may be prepared to pay a little more rent if your utility costs or service charges are reduced, which increases the reversionary value of the landlord’s interest, and therefore the landlord would be expected to cover the cost of the implementation.”
Other measures can be achieved at little or no cost, such as sharing data on energy or water usage.
Other agreements can make any works carried out by the tenant be disregarded on rent review, such as those that cut energy use or improve waste handling.
Finally he suggests an obligation on the landlord to identify the cost of sustainability or environmental initiatives within the service charges, and a provision that the costs of any works carried out by the landlord that increase energy efficiency or reduce waste be recoverable through the service charges.
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