The Green Building Council of South Africa recently unveiled its Green Lease Toolkit at the annual South African Property Owners’ Association International Convention and Property Exhibition in Durban. The GBCSA has kindly provided us with a copy of the Toolkit to give away here at gbNYC. Just like our page on Facebook (or drop a comment below if you’re already following us) before next Tuesday, July 17, at 5PM EDT and we’ll select one person at random from those who do so. If it isn’t you – or you just can’t wait – you can download a copy of the Toolkit directly from GBCSA here for R228.
Just a bit of background and a brief review: according to GBCSA, the Toolkit was developed from a “shared basis of both market need and market demand,” as South African landlords and tenants are increasingly demanding green leasing tools to assist them during the commercial leasing process. Both leasing novices and attorneys will find the Toolkit useful, as well as those who are simply interested in green building issues from an international perspective: as the introduction notes, the Toolkit is “suitable for the South African leasing environment and sensitive to common market characteristics, but on a par with international green leasing principles.”
The Toolkit also makes some important points about green leasing practices generally, particularly with respect to “hard” green leases (where provisions may penalize a party for failing to satisfy certain green lease objectives). Whether those types of provisions are enforceable under prevailing law – in South Africa or elsewhere – is still an open question, so the Toolkit cautions with respect to their implementation.
Also, in terms of hard green leases under the prevailing South African regulatory climate, the Toolkit notes “the absence of regulation governing the operational energy use of buildings means that performance-driven green leases with penalties are unlikely to be widely adopted in the short term.” However, the Toolkit does note that the South African Treasury has “indicated their preference for a carbon tax and the new building regulations include energy efficiency requirements. . . . Occupying and/or owning green buildings provide a buffer against these potential future regulatory changes.” This is an important argument advanced in favor of green building practices generally, particularly at the municipal level here in the United States, where governments – like New York City’s – have been active in requiring property owners to – at a minimum – disclose certain building performance data which can be facilitated through green lease provisions.
But what’s most notable about the Toolkit is that it’s presented from the perspective of the different types of green leases that can -or should – exist under different types of regulatory regimes. And, crucially, it also notes that the term “green lease” is a general one, simply describing a document ” for negotiating green building attributes between the owner and the tenant of a building. It does not necessarily refer only to a lease agreement.” Finally, and in the context of regulatory regimes, the Toolkit notes that green leases can also serve to assist corporate reporting requirements: for example, in South Africa, the Johannesburg Stock Exchange features a Socially Responsible Investment Index – introduced to “identify companies that embrace the triple bottom line and allowing for a broad assessment of company policies and practices against local and global standards.”
The final section of the Toolkit includes a sample Memorandum of Agreement between a landlord and tenant committed to green building practices, as well as several sample schedules to the MOA for tenant fit-outs and building management which should be useful no matter the jurisdiction you’re in. The Toolkit joins the U.S. Department of Energy’s recent effort to create a similar tool which compiles the ever-growing compilation of green lease resources, many of which we’ve discussed previously at our sister publication, the Green Real Estate Law Journal.