One interesting legal question that could arise in the green lease context is exactly how a court would construe aspirational clauses in the event the parties dispute exactly how “aspirational” those clauses should be.
Tag Archives | green lease provisions
If either the landlord or tenant breaches a green provision in a lease, what specific rights and remedies – if any – does the lease provide to the parties? The New South Wales Police Headquarters Building, just outside of Sydney, Australia, features a lease that gives the tenant a rent reduction if the landlord fails to maintain a certain level of third-party green building certification.
USGBC’s Green Lease Guide does much more than just discuss the split incentive that’s a major barrier to implementing a truly green lease; it provides tenants with a form environmental impact questionnaire designed to assist them in vetting potential properties, as well as eleven pages of sample green lease provisions. The Guide is primarily written for commercial office tenants, but landlords will find its background information useful as well.
Back in June, a Winnipeg developer unveiled 1735 Corydon Avenue, a 2-story, 12,800-square-foot office building which is the first in Canada’s Manitoba province to require all potential tenants to sign a green lease.
The possibility that a LEED-certified project could be “decertified” by USGBC or GBCI in the event that any of the new LEED 2009 Minimum Program Requirements (“MPRs”) are not satisfied presents a variety of novel legal issues which we presented earlier this year here at GRELJ when the first iteration of MPRs was announced by USGBC. Today, Engineering-News Record (“ENR”) published an article that highlights a number of those issues, but also raises the question of who, exactly, would have standing to bring a decertification proceeding. If strictly limited to USGBC or GBCI, a recent comment here at GRELJ from Brian Anderson (“lawsuits are bad for marketing”) suggests that decertification would be a remote possibility. However, in the ENR piece, which is titled Building Rating System Requirement Raises Concern and authored by Nadine Post, my colleague Ujjval Vyas notes that “[a]ny third party has the right to initiate a non-compliance action by USGBC. This creates a huge risk and provides standing to any entity whatsoever to injure a building owner or tenant.” If third parties can compel decertification proceedings, the risks associated with failing to comply with the MPRs are far more serious than if that discretion rests exclusively with USGBC or GBCI.
Many commentators suggest that, as a threshold issue, a green lease include an “environmental performance objective,” or a clause that requires both landlord and tenant to operate the demised premises pursuant to a set of very general, aspirational green building objectives. Upon reading a sample environmental performance objective clause, you may be reminded of the form language in the 2007 version of the AIA’s B101 Owner Architect Agreement, which obligates the architect to make a set of very vague and non-specific green building-related recommendations to the owner with respect to certain aspects of its proposed design for the project. While provisions in a lease that set forth a roadmap for landlord and tenant to operate demised premises in a sustainable manner should by no means be discouraged, it is important for landlords to carefully consider the specific language that they may choose to insert into a green lease as part of such clauses.