Business leases and energy efficiency: improvements, dilapidations, implied terms and lease renewals

Western, John David

Abstract

This thesis considers the two distinct areas of landlord and tenant law and building energy efficiency for older refurbished commercial buildings. Market forces are unlikely to help solve the split incentive problem by themselves. After explaining the background to green leases of which carbon reduction is only one aspect, a fictitious example is introduced to understand how and why the impact of Energy Performance Certificates (EPCs) and the MEES Regulations will impact upon business leases.
The reliability of domestic EPCs is found to be merely acceptable. Although energy efficiency of commercial buildings could be greatly improved under “deep” retrofits and such retrofits are financially viable, it is difficult to ascertain exact payback periods. However, when the physical reasons why heat seeps out from buildings (i.e., U-values, airtightness, and thermal bridges) are assessed, strong links are found to landlord and tenant law. Accordingly, to improve the EPC grade of a commercial demise by passive energy works, the building must be considered as a whole.
Using legal analogy and legal imagination to consider caselaw and Law Commission reports, possible implied statutory covenants for one party to be forced to carry out energy works are considered: something that may be possible in shorter leases.
Likewise, the present ways either for landlords to recover costs where they have done energy works, or for the tenant to recover such works as tenant’s improvements are examined and in both cases are found to be barely satisfactory. Finally, for noncontentious renewals only, the contents of the renewal lease under ss. 32 to 35 of the 1954 Landlord and Tenant Act of holding, rent, lease length and other terms are assessed with particular reference to break clauses. The Part II provisions are satisfactory, but because no guidance is given further legislation may be required.

Citation

Western, J. D. (2023). Business leases and energy efficiency: improvements, dilapidations, implied terms and lease renewals. (Thesis). Keele University

• Thesis Type: Thesis
• Deposit Date: Jul 19, 2023
• Publicly Available Date: Jul 19, 2023
• Additional Information: Digital copy of full text version available upon request from the Archives https://forms.office.com/e/sRWE7eQWgU - third party copyright content preventing thesis being published online.
• Award Date: 2023-06