Watts Bulletin

CRC costs and commercial tenants

The results of a consultation into how the Carbon Reduction Commitment (CRC) costs should be apportioned between landlords and tenants in new leases, have now been published.

In 2009, a consultation was launched by the British Property Federation (BPF) looking at the possibility of achieving cross-industry consensus over the way in which CRC costs might be apportioned between landlords and tenants in new leases. The results are now available on the BPF website.

Unfortunately the response to the consultation reached no clear consensus as to the next steps which should be taken and as a result, the BPF does not believe that a single industry standard CRC lease clause is achievable.

However, the working party responsible for the consultation does accept that there is merit in highlighting particular approaches that landlords may choose to follow, so that as far as possible similar structures are used to achieve the same objectives and simplify the drafting and negotiation processes. As a result, the working party is preparing a second edition of ‘The Carbon Reduction Commitment: A Guide for Landlords and Tenants’, which is due to be issued this summer. This will look at some of the ways in which tenants could contribute to landlords’ CRC costs and the pros and cons of each method. The new guide will take into account a number of the proposals put forward by landlords in recent months.

For more information and a copy of the consultation go to www.bpf.org.uk

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Watts Bulletin editor: Trevor Rushton.

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