New Commercial Lease Code gets thumbs up

Over 80 per cent of property professionals believe that increased transparency between landlord and tenant under the new Commercial Lease Code will eliminate costly and time consuming disputes, according to a snapshot survey by Lockton’s Real Estate & Construction division.

Property professionals overwhelmingly support the most recent edition of the Code; favouring its succinctness and clarity of expression. The Code provides clear direction for landlords with a 10-point guide outlining the requirements for a Code compliant lease. Landlords must give reasons for any departures from the Code – imbuing the process with a transparency attractive to both the lessor and lessee.

Richard Owen of Lockton’s Real Estate & Construction division says: “The Code was revised with the intention of improving leasing practice by creating a flexible and affordable letting market – benefiting both owners and occupiers. It will take a while to determine whether these aims have been realised, although early indications suggest that it is off to a good start.

“Disputes between landlord and tenant often arise as a result of misunderstanding and misinformation. The new Commercial Lease Code looks to spell out the process so that there is effectively a check-list before any deal is even entered into.

“Although the Code is voluntary, I am sure that the Government will be keeping a close eye on the market. If this edition is considered a failure then legislation to regulate leases for business premises could follow. With the advent of this new Code the property industry has an opportunity to demonstrate that self regulation can work.”