Yield Up

Statement of Intent

The Lease contains provisions that the L will give notice to the Tenant of any alterations it does not require reinstatement of and should have regard to adverse impacts on Environmental Performance (disregarding Waste) of reinstatement unless reinstatement required for use/re-letting post Lease.  

Where reinstatement is required, the objective is to reduce the amount of waste generated on yield up, minimise the amount that is sent to landfill and maximise the amount that is reused, repurposed, reprocessed or recycled including through shared agreement to achieve re-use, waste policies and recycling targets. 

Preamble

The objectives of this clause are: (a) for some account to be taken of Environmental Performance in the consideration of whether reinstatement of all lawful tenant’s alterations is required with the aim of reducing the amount of Waste generated on yield up and (b) where Waste is generated on yield up, to minimise the amount that is sent to landfill and maximise the amount that is Salvaged.   

Whether or not it is appropriate to require alterations to be reinstated at the end of the term (particularly in respect of alterations with the express purpose of improving the Environmental Performance of the Premises) should, ideally, be considered by the parties as part of the application for consent to those alterations and documented in any licence to alter.  However, it can be difficult to decide what will be appropriate in the future and so paragraph (a) of this clause provides that the Landlord is to give due consideration to whether reinstatement is appropriate at the end of the term. 

There are two elements to the proposed clause:

  •  Paragraph (a) 

The BBP recognises that a blanket requirement to reinstate can lead to unnecessary Waste and inefficiencies and possibly affect Environmental Performance in ways beyond the creation of Waste by the removal. However, the Landlord should not be prevented from requiring the Tenant to remove relevant  alterations where the Landlord judges it necessary for re-use or re-letting the Premises. 

Paragraph(a) (which is the same in each version of the clause) seeks to strike a balance between these two conflicting positions and should replace clause 4.13.1 (d) of the MCL. Paragraph (a) requires reinstatement of all alterations unless the Landlord serves notice to say that reinstatement is not required. When making this decision the Landlord must consider the environmental impact of requiring reinstatement but only where its intention for the re-use or re-letting of the Premises does not require reinstatement. This replaces the requirement for all alterations to be reinstated unless and to the extent that the Landlord and Tenant otherwise agree which is the position in clause 4.13.1 (d) of the MCL. If no notice is served then the Tenant must reinstate. Given it is not in the Landlord’s interest to adversely affect the Environmental Performance of its property landlords should consider that this is an appropriate move away from the market standard position on alterations.  

Paragraph (a) includes a disregard of Waste in the context of the obligation to consider the environmental impact because increased Waste is a probable consequence of all reinstatement. However, although excluded from paragraph (a) responsible landlords are encouraged to consider minimising Waste when they consider their approach to reinstatement. 

  • Paragraph (b) 

Paragraph (b) of this clause (which gets progressively darker) applies where tenants undertake reinstatement works on yield up of the Lease. 

The light green version of this clause is a simple obligation to minimise the amount of Waste that is sent to landfill and Salvage as much Waste as is reasonably practicable. 

The medium green version of this clause also requires the Tenant to share data and for the Tenant to comply with any Waste Policy for the Building. 

The dark green version of this clause also requires the Landlord to prepare a Waste Policy, for the parties to agree a Waste Salvage Plan and for a specified Salvage Target to be met. The Salvage Target percentage will be for negotiation and the appropriate percentage is likely to vary depending on the location of a building and the facilities available locally.

Each of the template clauses can be made "greener" by making the obligations absolute obligations rather than reasonable endeavours obligations. 

Separate drafting is provided in this toolkit (Recycling of Waste) to address Waste generated from all activities in the building (and not just Waste on yield up). Where both clauses are to be included, the parties should consider any overlap between the clauses.  

The "BBP Stripout Waste Guidelines" Version 1.1 dated July 2018 is a useful reference guide for those looking for further information on this topic (prepared by BBP Australia). 

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Dark Green Clause:

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Suggested Drafting

Light Green Clause

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  • (a) [By the End Date the Tenant must have removed] all Permitted Works unless and to the extent that the Landlord gives [formal] notice to the Tenant not later than 3 months before the End Date specifying which Permitted Works should not be removed.  When considering whether any Permitted  Works should not be removed the Landlord will have due regard to any adverse impact on the Environmental Performance of the Premises (disregarding Waste generated by the removal of any Permitted Works  for these purposes) of the removal of any Permitted Works except where removal of Permitted Works is required due to the Landlord’s intentions in respect of the use or re-letting of the Premises [or the Building] after the End Date
     
  • (b) When complying with its obligations to remove the Permitted Works in accordance with clause [4.13.1 (d) of the MCL] the Tenant must [use [all] reasonable endeavours to]:
    • (i) minimise the amount of Waste sent to landfill; and
    • (ii) Salvage as much Waste as reasonably practicable.

Drafting note

Paragraph (a) of this clause replaces clause 4.13.1 (d) of the MCL and the words in square brackets at the start can then be deleted as they are part of clause 4.13.1 of the MCL.  

Clause 2.3.3 of the MCL explains that reference to formal notice is to a notice which has been served in accordance with the formalities set out in clause 6.4 of the MCL. 

Paragraph (b) of this clause can be added as a new paragraph in clause 4.13 of the MCL or in the Sustainability schedule (Schedule 7) of the MCL. 

Medium Green Clause

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  • (a) [By the End Date the Tenant must have removed] all Permitted Works unless and to the extent that the Landlord gives [formal] notice to the Tenant not later than 3 months before the End Date specifying which Permitted Works should not be removed.  When considering whether any Permitted  Works should not be removed the Landlord will have due regard to any adverse impact on the Environmental Performance of the Premises (disregarding Waste generated by the removal of any Permitted Works  for these purposes) of the removal of any Permitted Works except where removal of Permitted Works is required due to the Landlord’s intentions in respect of the use or re-letting of the Premises [or the Building] after the End Date
     
  • (b) When complying with its obligations to remove the Permitted Works in accordance with clause [4.13.1 (d) of the MCL] the Tenant must [use [all] reasonable endeavours to]:
    • (i) minimise the amount of Waste sent to landfill;
    • (ii) Salvage as much Waste as reasonably practicable; 
    • (iii) capture and promptly share with the Landlord data relating to the amount of Waste removed from the Premises [or the Building], the amount of Waste Salvaged and the amount of Waste sent to landfill; and
    • (iv) deal with Waste in accordance with any Waste policy in place for the Premises [or the Building] from time to time. 

Drafting note

Paragraph (a) of this clause replaces clause 4.13.1 (d) of the MCL and the words in square brackets at the start can then be deleted as they are part of clause 4.13.1 of the MCL.  

Clause 2.3.3 of the MCL explains that reference to formal notice is to a notice which has been served in accordance with the formalities set out in clause 6.4 of the MCL. 

Paragraph (b) of this clause can be added as a new paragraph in clause 4.13 of the MCL or in the Sustainability schedule (Schedule 7) of the MCL.

Dark Green Clause

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  • (a) [By the End Date the Tenant must have removed] all Permitted Works unless and to the extent that the Landlord gives [formal] notice to the Tenant not later than 3 months before the End Date specifying which Permitted Works should not be removed.  When considering whether any Permitted  Works should not be removed the Landlord will have due regard to any adverse impact on the Environmental Performance of the Premises (disregarding Waste generated by the removal of any Permitted Works  for these purposes) of the removal of any Permitted Works except where removal of Permitted Works is required due to the Landlord’s intentions in respect of the use or re-letting of the Premises [or the Building] after the End Date
     
  • (b)    Salvage of Waste
    • (i)    The Landlord and the Tenant acknowledge their joint goal to achieve the Salvage Target in relation to all Waste removed from the Premises [or the Building] as part of any reinstatement and strip-out works at the End Date.
    • (ii)    [As soon as reasonably practicable and in any event no later than [6] months] prior to the End Date, the Landlord and the Tenant must use [all] reasonable endeavours to agree a Waste Salvage Plan];
    • (iii)    The Landlord must at all times maintain a Waste Policy and must make a copy of the Waste Policy available to the Tenant each time it is updated; 
    • (iv)    When complying with its obligation in clause [4.13 of the MCL] the Tenant must [use [all] reasonable endeavours to]:
      • minimise the amount of Waste sent to landfill;
      • Salvage as much Waste as reasonably practicable; 
      • comply with the Waste Salvage Plan; 
      • achieve the Salvage Target; 
      • capture and provide the Landlord with data relating to the amount of Waste removed from the Premises [or the Building], the amount of Waste Salvaged and the amount of Waste sent to landfill; and
      • deal with all Waste in accordance with the Waste Policy. 


Drafting note

Paragraph (a) of this clause replaces clause 4.13.1 (d) of the MCL and the words in square brackets at the start can then be deleted as they are part of clause 4.13.1 of the MCL.  

Clause 2.3.3 of the MCL explains that reference to formal notice is to a notice which has been served in accordance with the formalities set out in clause 6.4 of the MCL. 

Paragraph (b) of this clause can be added as a new paragraph in clause 4.13 of the MCL or in the Sustainability schedule (Schedule 7) of the MCL. 

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