Addition to clause governing Tenant’s alterations
Statement of Intent
The Lease contains provisions restricting Tenant alterations which adversely affect the Environmental Performance, EPC rating or other rating of the Building or the Premises. The Lease includes provisions giving the Tenant the right to do alterations which improve the Environmental Performance, EPC or other environmental rating, with L's consent not to be unreasonably withheld.
Preamble
A Tenant’s alterations have the potential to adversely affect the Environmental Performance, the EPC Rating or any Environmental Rating of the Premises or the Building. The BBP considers that restrictions should be imposed on the Tenant to prevent works which have that effect.
For details of when a new EPC would be required see the drafting note to the Restrictions on the Landlord’s right to do works clause. Even where the Tenant’s alterations do not require a new EPC to be obtained, they may have an adverse effect on any new EPC obtained after the expiry of the existing EPC.
The clause does not expressly deal with the Tenant’s initial fit-out works. These are often dealt with in an agreement for lease and will usually be the subject of a Licence for Alterations where the works will be agreed in advance of exchange of the agreement for lease. Agreements for lease may also require compliance with a Landlord’s Fit -Out Guide or similar document. Consideration should be given to incorporating the provisions of this clause in any document governing the Tenant’s fit out.
The Government has consulted on proposals for a six month exemption from the requirement to produce an EPC which meets the minimum energy efficiency standard in the case of shell and core lettings so that the Tenant’s fit-out will be assessed for the purposes of the EPC. Landlords will want to ensure the Tenant’s fit-out meets the requirements for the current and any proposed minimum EPC Rating. Consideration should be given to further provisions which require a fit-out:
- to result in a specified minimum EPC Rating; and
- to be designed and to operate to minimise energy and water consumption and Waste.
Gearing up for your Green Lease Journey
Light Green Clause:
Accelerating your Green Lease Journey
Medium Green Clause:
Driving Transformation with your Green Lease Journey
Dark Green Clause:
Suggested Drafting
Light Green Clause
The Tenant must not make any alterations or additions to the Premises unless it has first given to the Landlord drawings and specifications and any other information in sufficient detail for an accurate assessment to be made of its effect on the Environmental Performance, or any EPC Rating or any Environmental Rating of the Premises [or the Building].
The Tenant must not carry out any alterations or additions to the Premises which would be reasonably expected to adversely affect the Environmental Performance, or any EPC Rating or any Environmental Rating of the Premises [and the Building] unless it first obtains the written consent of the Landlord to such alterations (even if that consent is not otherwise required by this Lease).
On completion of any alterations or additions the Tenant must give to the Landlord as built drawings and specifications and any other information in sufficient detail for an accurate assessment to be made of the effect of the works on the Environmental Performance or any EPC Rating or any Environmental Rating of the Premises [or the Building].
Drafting Note
If using MCL you will need to delete clause 4.11.2 of the MCL and replace it with this clause.
Clause 2.4.8 of the MCL implies that consent will not be unreasonably withheld.
The definition of Premises in the MCL includes Conducting Media and Landlord's plant, equipment and fixtures exclusively serving the Premises and all Tenant’s fixtures. It may also include the Tenant’s fire detection systems.
Medium Green Clause
The Tenant must not make any alterations or additions to the Premises unless it has first given to the Landlord drawings and specifications and any other information in sufficient detail for an accurate assessment to be made of its effect on the Environmental Performance or any EPC Rating or any Environmental Rating of the Premises [or the Building].
The Tenant must not carry out any alterations or additions to the Premises which would be reasonably expected to adversely affect the Environmental Performance, or any EPC Rating or any Environmental Rating of the Premises [and the Building].
On completion of any alterations or additions the Tenant must give to the Landlord as built drawings and specifications and any other information in sufficient detail for an accurate assessment to be made of effect of the works on the Environmental Performance or any EPC Rating or any Environmental Rating of the Premises [or the Building].
Drafting Note
If using MCL you will need to delete clause 4.11.2 of the MCL and replace it with this clause.
Clause 2.4.8 of the MCL implies that consent will not be unreasonably withheld.
The definition of Premises in the MCL includes Conducting Media and Landlord’s plant, equipment and fixtures exclusively serving the Premises and all Tenant’s fixtures. It may also include the Tenant’s fire detection systems.
Reference in this clause to “any EPC” is deliberate as it is intended to catch both the current and a future EPC.
The clause presupposes that the lease permits the Tenant to carry out works to the Premises subject to specified constraints (typically a prohibition on structural works, or a requirement for Landlord’s consent to most alterations, such consent not to be unreasonably withheld). Sometimes the lease gives the Tenant much wider freedom to make alterations. It is important first to check what the other alterations provisions in the lease require/permit, and then to judge whether additional constraints on works which adversely affect Environmental Performance are necessary at all, and, if so, how to dovetail them. This clause acts as an absolute prohibition on alterations which might reasonably be expected to have an adverse effect on the Environmental Performance or the current or future EPC Rating (or both of them) or any Environmental Rating.