Model law

Landlord and Tenant Act 1954 (Amendment) Green Leases Bill

Bill’s Law

Amend the Landlord and Tenant Act 1954 (LTA 1954) to require by law that all new business leases include green lease clauses.

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Why use this?

At present there are various green lease toolkits for landlords and tenants to use. But these are not becoming market standard quickly enough and are often not adopted parties in business tenancies.

This Model Law addresses the issue of costs vs. environmental best practice.

This Model Law could apply to all business tenancies, whether contracted inside or outside of LTA 1954.

How it promotes a net zero future

Most new and renewal business tenancies will include green lease clauses.

This will facilitate green investment by landlords into their buildings, lead to a reduction in utility bills and lead to a potential increase in the value of the property.

The law

Landlord and Tenant Act 1954

(Amendment) Green Leases

A BILL TO

Amend the Landlord and Tenant Act 1954 to redefine a business tenancy as one that includes green lease clauses.

BE IT ENACTED by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:

1. Addition of Section 23A of Part II of the Landlord and Tenant Act 1954

A new Section 23A of Part II of the Landlord and Tenant Act 1954 shall be included to state the following:

23A Any agreement relating to a tenancy to which this Part of this Act applies (whether contained in the instrument creating the tenancy or not) must include Green Lease Provisions.


2. Addition of new definition of “Green Lease Provisions”

Green Lease Provisions: the green lease clauses endorsed by the Better Building Partnership from time to time (or such other equivalent collaboration relating to the property industry as confirmed by the relevant Secretary of State from time to time) and to the extent not covered in the green lease clauses referred to above, the landlord and tenant shall agree terms to incorporate the following:

i. The landlord is to establish a sinking fund specifically for environmental investment in the property.

ii. The landlord is to survey the property every three years with respect to environmental improvements having regard to the recommended practices from time to time of the Better Building Partnership.

iii. The landlord is to use the funds in the sinking fund on environmental improvements to the property as recommended by the survey.

iv. The Landlord can ask the tenant to contribute to the sinking fund via a service charge (if any) with a cap on annual contribution to 2% of annual rent.

v. The tenant is entitled to an exclusion to its obligation to pay service charge costs incurred by the landlord where the costs are incurred as a result of unsustainable practices by the landlord.

 

3. Addition of Section 38B of Part II of the Landlord and Tenant Act 1954

A new Section 38B of Part II of the Landlord and Tenant Act 1954 shall be included to state the following:

38B Any agreement relating to a tenancy which is to be excluded from this Part of this Act under section 38B of this Act must include Green Lease Provisions.