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Green lease puts the wood on tenants

Green lease puts the wood on tenants

MELBOURNE’S showpiece environmentally sound commercial building, the 60L Green Building, is set to become a showpiece in legally binding lease agreements as well.Situated at 60 Leicester Street,…

MELBOURNE’S showpiece environmentally sound commercial building, the 60L Green Building, is set to become a showpiece in legally binding lease agreements as well.

Situated at 60 Leicester Street, Carlton, the 60L building was built last year with the intention of setting the bar on what can be achieved using environmentally sustainable principles, within the financial boundaries of a commercial development.

The recipient of many awards for creation of a sustainable and commercially viable office/retail building, the building uses a tenth of the mains water of a traditional development.

The architects of the building’s unique features, the Green Building Partnership, have decided to present some of the lessons they have learned through a series of not-for-profit workshops.

First cab off the rank is a seminar to be held 29 April on the building’s Green Lease.

Herbert Geer & Rundle senior associate Adam Bratt who designed the lease for the building from scratch, and who will be presenting the seminar about it, said that it is “quite distinct because of the cooperative nature of the landlord and tenant relationship that’s required”.

The 60L Green Lease is based on the premise that the performance of the building is critically dependent on the cooperation and behaviour of the tenants.There is little point in having the world’s most efficient technology unless that technology is going to be used in an efficient manner. To this end, the lease needs to provide for this.

The work of more than a year, Bratt said he sees it as “quite a landmark lease” in that it does shift the boundaries of what is traditionally entailed in a lease.

“The right to quiet enjoyment for instance must be maintained otherwise it’s not a lease. However, we had to make sure that the landlord had the right to monitor the building’s environmental performance. It goes a bit further than the traditional rights of the landlord,” he said.

In other words, the lease has had to allow for the landlord being able to influence the tenants’ behaviour within the tenancy, not just the common areas, which creates the potential for friction with the right to quiet enjoyment if not handled correctly.

“It’s seen as a two-way relationship as opposed to the tenant having certain obligations that are isolated from the landlord’s obligations. That’s where there is a conceptual shift,” he said.

For instance, the building’s energy management plan (EMP) provides tenants with information on installation, sourcing and workplace practices to cover every facet of the green tenancy. For example, the EMP points out, “Unattended computers with complex screensavers generating 20-100+ times as much waste heat as necessary are unfortunately commonplace”.

The EMP has been prepared by Sustainable Solutions Pty Ltd in conjunction with the Australian Conservation Foundation and the Green Building Partnership, with assistance from the City of Melbourne.

It provides advice in sourcing office equipment and materials for fit out; practices for tenancy operation, tenancy fit out and the relocation of the tenancy. There is also a fit out manual and fit out specifications in the lease.

The building managers provide additional information and advice to tenants on sourcing the most environmentally appropriate materials.

The lease agreement incorporates clauses with regard to tenant and landlord responsibilities for ensuring a high level of environmentally sustainable outcomes.

Bratt sees the popularity of this type of lease growing as more buildings such as 60L become more mainstream. He says that a number of his other clients have already expressed interest in adopting a similar leasing arrangement. He points to similar initiatives in Europe as an indicator that Australia still has some way to go in terms of greening its commercial leasing arrangements; however, the level of interest that his lease workshop has generated is encouraging.

Michael Redfern, chair of the Law Institute of Victoria’s, Leasing Committee, who will also chair the Green Lease seminar, said that while the initiatives were interesting, he can’t see it being widely adopted at this stage. “I suspect, as I was told, that it [will more likely be adopted] in the area of semi-government and local government who have a reason for pushing it. It’s still pretty altruistic wouldn’t you think?” he said.

However, the 60L Building is completely occupied and there are more tenants eager to move in.

Further information on the building and the seminar series can be accessed at www.60lgreenbuilding.com.

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