In Part I of our series on the particulars of Green Leasing, we discussed Lease Term and Operating Expenses. Now we turn to a robust area for implementing sustainable processes between Landlords and Tenants:
Interior Alterations and Repairs
A typical commercial lease will have two separate sections, one on maintenance and repairs, and one on tenant improvements. The green leasing concern is the same in each – what requirements or incentives can be inserted in the Lease to assure that any changes to the premises live up to the parties’ expectations surrounding sustainability and energy efficiency?
First, the lease must deal with the minor, day-to-day changes that after move-in are typically the responsibility of the tenant. The perfect example here is lighting. As the landlord, does your third party rating agency require that you maintain certain forms of lighting? If you’re LEED-certified, it likely does. LEED for Commercial Interiors awards points for the percent reduction in lighting power below certain standards. If the tenant were to insert lighting that was not motion sensitive, for example, your lighting power reduction would be reduced and your LEED level of certification jeopardized. A simple insertion in the appropriate lease section requiring tenant to comply with landlord’s sustainability practices and any third-party rating system can give landlord some control of tenant’s actions in this area.
Second are those more major renovations undertaken by a tenant. Here, the lease needs to assure landlord and tenant cooperate and communicate to either (a) maintain any sustainable systems or third party ratings already employed for the project; or (b) for an initial build-out, agree on a level of sustainability or certification that is reasonable and desirable for each party. One major concern at this level is the contractors employed by tenant – a green lease should spell out that any professional engaged for tenant’s work must be LEED qualified (or a similar certification assuring the contractor is familiar with sustainable design). The lease may go so far as to specify the specific level of LEED certification to be sought for the interior design, although such a section would need sufficient caveats and waivers to assure neither party was accepting undue risk if the desired certification was not achieved.