Legal Agreement

The Lease and License for Alterations are core documents in defining obligations, rights and mechanisms associated with the fit-out and occupancy of a space. Fit-out activities themselves may be undertaken under an Agreement to Lease or Heads of Terms prior to the Lease being drawn down upon completion. It is therefore important for both Owner and Occupier to consider how any requirements identified and agreed within Setting Requirements should be incorporated within any of these legal agreements. 

Aspects the owner and occupier may with to consider include:

  • Procuring and maintaining EPC ratings
  • Minimum standards for fit-out equipment and materials
  • Owner support provided to occupiers to deliver best-practice
  • Requirements associated with capital contributions 
  • Sharing data during occupancy
  • The implementation of a more sustainable reinstatement approach

The BBP Green Lease Toolkit provides further detail for Owners on building sustainability into the leasing process.

Aspects for Inclusion

Procuring & maintaining EPCs

The owner may require the occupier to:

  • Not obtain an EPC unless required by law.
  • Notify the owner if the occupier wishes to undertaken an EPC. The owner may then chose to undertake an assessment or require the occupier to use a nominated assessor.
  • ​Provide sufficient information to enable the owner to assess the impact of fit-out work on the EPC rating.
  • Ensure the fit-out does not adversely affect the EPC rating.

Why? 

Such an approach provides the owner with a review point to assess the impact of fit-out proposals against Minimum Energy Efficiency Standards. It therefore provides the opportunity for the owner to establish the most appropriate mitigation strategy with the occupier and ensure the property will not fall foul of the regulations - negatively impacting property value.

Notifications from the occupier of a desire to undertake a new EPC assessment, followed by the requirement to use a nominated assessor will also help reduce MEES by ensuring an unplanned EPC certificate is not lodged by mistake, and that when a new one is procured, the owner can be assured of its quality.

Minimum Requirements 

Either party may set minimum requirements as part of the design and delivery of the fit-out. This may be a specific Rating Tool certification, or more granular, such as a specific design element e.g. source of timber. 

Such minimum requirements may derive from an initial Requirements Brief, as well as an owner's fit-out guide.

Why?  

This will be a collaborative process between owner and occupier. Having requirements established in a legal document will ensure compliance procedures are in place to deliver desired outcomes. From an owners perspective, a principle aim will be to ensure that an occupier's fit-out will compliment and be compatible with the existing base-building systems already in place. This may be through the use of a fit-out guide for the property.

Owner Support

Owner commits to  support the occupier in their effort to implement best practice design measures.

Why?

Occupiers may not have necessary resource or expertise to achieve a specific third party certification, or to implement best-practice measures. To support occupiers and achieve a mutually beneficial outcome, the owner is encouraged to support the occupier and lend their sustainability expertise as advisory support. 

Capital Contributions

The owner may set specific requirements as to how capital contributions towards the fit-out are spent. This may relate to overall targets, third-party certifications or requirements regarding equipment and materials selection.

Why?

The provision of a capital contribution in a lump sum, instead of a free rent period, is an efficient way to engage in constructive dialogue with the occupier and ensure that these funds are spent on implementing best-practice measures inline within any specific owner requirements.

Data Sharing

Owner and occupier commit to gather and share performance data Into Occupancy. This may include:

  • Occupancy data
  • Utility & waste performance data
  • Health & wellbeing aspects e.g. indoor air-quality 
  • Local amenity and transport information
  • Activities supporting local biodiversity and social value

Why?

Engaging early in a constructive dialogue at an early stage can support the development of a positive relationship and build trust between both parties. Agree on a framework for the collection and sharing of performance data will help both parties understand how the building performs in operation and provide the opportunity to discuss improvement strategies. It will also support wider CSR reporting e.g. Corporate targets or GRESB.

BBP Green Building Management Toolkit provides guidance on setting and operating such a framework.

Sustainable Reinstatement

Owner and occupier commit to a more sustainable approach to reinstatement.

Why?

Taking a lifecycle approach could reduce cost, waste and disruption for both owner and occupier around potentially avoidable reinstatement and refurbishment works. Suitable reinstatement arrangements could be focused around the audit process to identify opportunities to retain or upcycle / recycle / re-use fit-out elements off-site.