A green lease is a commercial lease that helps balance the interests of tenants and landlords for energy efficiency investments. Every green lease is necessarily different. Landlords and tenants have different needs and objectives, and therefore a green lease is a relatively nebulous thing. In general, both parties sit down at the bargaining table before signing a green lease, as there are additional requirements for each party to the agreement. Thanks to a generous grant from YARDI, BOMA International`s Green Lease Guide can now be downloaded for free. This important guide to creating a green rental contract will help you solve your sustainability problems and develop stronger working relationships with your tenants. Click here to download. In our last contribution to education, we looked at the differences between different types of commercial leases. Quick Summary: The most common types are “gross” under which the lessor pays costs such as taxes and electricity bills and the tenant pays a flat fee, and “net” under which the tenant pays these costs. A green lease can be raw or net – it is important that the interests focus on energy efficiency.
In 2009, Cardiff University`s Centre for Research in the Built Environment (CRiBE) Greening the commercial property sector: A guide for developing and implementing best practice through the UK leasing process published examples of “green” clauses that could be included in leasing contracts. The use of green leases allows us, together with our tenants, to achieve a reduction in our environmental responsibility in relation to individual action. If you are already a tenant, just contact your property manager to sign a green rental agreement. If used correctly, a green lease can be a powerful tool to reduce operating costs, increase the value of real estate and achieve sustainable development goals for both sides of the equation. While the ecological and financial benefits of energy-efficient buildings are undisputed, real estate professionals need a foolproof plan to execute a lease that achieves and maintains sustainable building operations. For more than 30 years, BOMA International has been offering the industry a standard lease agreement that is considered the standard for commercial leasing contracts. In 2005, BOMA developed its model lease to provide the industry with a step-by-step guide on executing a lease with sustainable development attributes. This new version updated the guidelines. A green lease may also include non-financial concessions. A tenant may agree that cleaning and repairs are carried out during the day while using the space. This can be a bit annoying, but it prevents the operation of the building at night, which reduces incidental costs. A tenant may also agree to close window screens on hot, sunny days or to make other concessions more specific to the area.
Cardiff University`s Green Leases building management website provides more information on green rentals in the UK and around the world. There are many shades of green leasing ranging from light green to “dark green”: green leases are seen as a progressive step forward for sustainable development.