Code of Practice - Reading report
The long awaited Reading report on the commercial lease code has now been published. The authors have found that there is greater flexibility in the market than there used to be but I dont read the report as suggesting that this is due particularly to the code. In particular the inclusion in leases of a right to terminate by means of a tenants break clause has increased over the past two years. However, most importantly, the upwards only rent review clause is still universal. The report states: To the extent that tenants who have only recently signed their leases can be the judge, there is overwhelming evidence that they are satisfied with the leases that they have negotiated.
The conclusions of the report can be found at section 9.3.
Reading Report on Commercial Lease Code
The government has responded to the Report. It intends "to undertake a review of the law of assignment and subletting, with the aim of easing the position for tenants while not jeopardising property investment, including looking at legislative options". But has decided not "to legislate against upward only rent review clauses at present".
Ministerial statement
Articles:A new lease of life by Crosby, Murdoch and Hughes An explanation of the Reading report on the commercial lease code from the academics at Reading University who carried out the research (Estates Gazette, 5 March 2005, p179)
- At last, tenants get the breaks by Malcolm Hull, Drivers Jonas More comment on the Reading report (Estates Gazette, 5 March 2005, p187)
Upwards only rent reviews by Anna Senior, Coudert Brothers Explanation of the government consultation paper. (Landlord and Tenant Review, Vol 9, issue 1, p11)
Upwards only rent reviews - The Final Curtain? by Malcolm Hull, Drivers Jonas Explores current trends in commercial property leasing (Landlord and Tenant Review, Vol 9, issue 1, p13)
Rent: the review by John Martin, Pinsent Masons A summary of the current position in relation to the code and a discussion of the case law that touches on the points now under discussion, ie alienation clauses (Solicitors Journal, 13 May 2005, p564).
Commercial Property Standard Enquiries
Standard form pre-contract enquiries produced by the London Property Support Lawyers Group and endorsed by the British Property Federation. Available free of charge from the PLC Property Law site or the British Property Federation site.
Model clauses
The British Property Federation and the British Council for Offices have jointly produced a set of Model Clauses for an FRI Office Lease of Whole.
Article: "Model clauses" by John Martin, Pinsents - An explanation of the model clauses. Goes through all the main clauses (Solicitors Journal, 14 March 2003, p284).
Negotiating leases
Article: "The early bird catches the terms" by Mark Owen and John Martin, Pinsent Masons - The authors suggest that traditional skeletal heads of terms are unsatisfactory and that much more thought should go into the terms of a lease at an earlier stage. All the main terms of a lease are discussed to illustrate the point. (Estates Gazette, 27 July 2002, p126).
Registration of leases
Under the Land Registration Act 2002 all leases of over seven years now have to be registered. One consequence of this new requirement is that the Land Registry are proposing that there should be a standard format or standard particulars for such lease. For further details click here.
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