Designed to remain adaptable in the face of ongoing environmental imperatives, the toolkit includes various green lease clauses catering to different levels of ambition to suit those that may either be starting their sustainability journey, or those whose sustainability policies are embedded.

At its core, the toolkit outlines the ‘green lease essentials’, a compilation of 10 key points deemed essential for defining a truly ‘green lease’, which the BBP hope will become the industry standard. While several of these points are important, some will not have any material effect on the lease end dilapidations process. These include extensions of landlord rights to complete energy efficient improvements, procurement of renewable electricity, data sharing and metering initiatives, and behavioural change to ensure the building systems are optimised.

There are, however, some clauses which will certainly impact the way in which dilapidations claims should be dealt with at expiry of the lease. Most notably, these include:

Reinstatement

Under the proposed framework, landlords will be required to notify the tenant of any alterations they wish to retain. A positive obligation will be placed on the landlord to consider the adverse environmental effects of requesting reinstatement and it must be reasonable to do so (considering the potential use post expiry). Where strip-out of alterations is justifiable, there will then be an obligation on the tenant to do so in a manner which reduces waste to landfill and increases re-use and recycling. Moreover, tenant may face further obligations to devise Waste Recovery Plans and achieve specific salvage targets.

Co-operation

There is proposed drafting around the shared aim of improving Environmental Performance and the necessity of reasonable co-operation to achieve this.

Waste management

There will be obligations for both landlords and tenants to minimise waste generated from all activities. A lot of this will focus on day-to-day use of the building such as segregation of waste, although this will also extend to the way in which strip-out and reinstatement is dealt with at expiry of the lease.

From a dilapidations perspective, there are likely to be wide ranging discussions, and potentially disputes, about how these obligations are implemented. Questions about whether it is ‘reasonable’ to request reinstatement and whether the landlord has suitably co-operated with the tenant on the matter of reinstatement are a couple which are initially obvious.  

To enable positive discussions, it will be key to understand the true impact of reinstatement and to ensure this is measurable by quantifying the embodied carbon impact of the ‘strip-out’ items within the schedule of dilapidations. An approach we at Air Building Consultancy are already undertaking, ensuring informed decision making for our clients.

As we navigate the evolving landscape of sustainable leasing practice, proactive engagement and a detailed understanding of environmental implications are paramount. More collaboration and informed decision making will likely shape the future of lease end dilapidations negotiations.