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The Lease Code – from voluntary to professional statement

  • United Kingdom
  • Real estate

13-03-2018

The RICS is consulting on a new draft professional statement which includes a new code for leasing business premises which would replace the Code for Leasing Business Premises 2007, which at present is voluntary. The draft practice statement contains two requirements that will be mandatory for RICS members. These are firstly, that negotiations over the lease must be approached by parties in a constructive manner that displays integrity and respect, and secondly that the heads of terms must contain a set of minimum ifnformation. The draft lease code that forms part of the practice statement then goes on to list significant best practice guidance which RICS members would be expected to follow.

For example, the  new lease code suggests that landlords should give tenants the benefit of any insurance premium discounts, and that leases should contain provisions that encourage co-operation between the parties to improve energy efficiency.

Given that the new lease code will be binding on RICS members should it come into force by way of a professional statement, take the opportunity to respond to the consultation.  It closes at midnight on 12 April.

Consider your template heads of terms to be sure that they would contain all the mandatory minimum information that the new lease code would require.

Review your template lease documents to ensure that lease provisions either follow the best practice guidance of the draft professional statement, or that there are good reasons for the divergences.

It is likely that tenants and their advisers will refer to the new lease code, and its more binding nature, during lease negotiations.

If you would like further information as to the differences between the existing Code for Leasing Business Premises 2007, and the draft new lease code, please get in touch with your usual Eversheds Sutherland contact.

For more information contact

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