Tuesday, March 06, 2024
Landlords risk landing in court
Local landlords could end up in court if they fail to comply with changes in legislation to commercial leases according to Yorkshire-based chartered surveyors Lambert Smith Hampton.
"Although the Code of Practice for Commercial Leases 2007 (the 'Lease Code') remains voluntary," explains associate director John Hayward "it is representative of best practice. When landlords are non-compliant they risk ending up in court to justify departure from it."
The 2007 revision of the Lease Code, prompted by the Minister for Housing and Planning, Yvette Cooper MP, is a concerted effort by all parties involved in commercial property, including landlords, tenants and surveyors, to regulate the industry.
Although the Lease Code is by no means a substitute for professional advice, it is user friendly for those who have little or no experience of leasing commercial premises. It consists of three documents one containing recommendations to landlords, the second outlining occupier's needs and the third detailing what should be contained in a commercial lease. The Lease Code therefore, has the potential to influence every business in England and Wales for the better.
John continues: "The future of the industry depends on landlords and tenants complying with the new code, yet this new legislation continues to be ignored, particularly by agency surveyors doing the deals 'on the ground'.
"If landlords want to protect the investment by averting further government intervention they must play an active role by instructing the appointed agent. Flexible terms outlined in the code to the tenant or their agent at the commencement of negotiations needs to be addressed."
The intention of the Lease Code is to ensure flexibility and transparency for both landlord and occupiers to build confidence between both parties. For example a constant concern of landlords wanting to increase investment value is that the government could ban upward-only rent reviews, while occupiers fear they will have no option but to face constant increases in monthly payments. The Lease Code clearly states that alternatives should be made available to occupiers, a flexibility that has the potential to appease both landlord and tenant.
"Although the Code of Practice for Commercial Leases 2007 (the 'Lease Code') remains voluntary," explains associate director John Hayward "it is representative of best practice. When landlords are non-compliant they risk ending up in court to justify departure from it."
The 2007 revision of the Lease Code, prompted by the Minister for Housing and Planning, Yvette Cooper MP, is a concerted effort by all parties involved in commercial property, including landlords, tenants and surveyors, to regulate the industry.
Although the Lease Code is by no means a substitute for professional advice, it is user friendly for those who have little or no experience of leasing commercial premises. It consists of three documents one containing recommendations to landlords, the second outlining occupier's needs and the third detailing what should be contained in a commercial lease. The Lease Code therefore, has the potential to influence every business in England and Wales for the better.
John continues: "The future of the industry depends on landlords and tenants complying with the new code, yet this new legislation continues to be ignored, particularly by agency surveyors doing the deals 'on the ground'.
"If landlords want to protect the investment by averting further government intervention they must play an active role by instructing the appointed agent. Flexible terms outlined in the code to the tenant or their agent at the commencement of negotiations needs to be addressed."
The intention of the Lease Code is to ensure flexibility and transparency for both landlord and occupiers to build confidence between both parties. For example a constant concern of landlords wanting to increase investment value is that the government could ban upward-only rent reviews, while occupiers fear they will have no option but to face constant increases in monthly payments. The Lease Code clearly states that alternatives should be made available to occupiers, a flexibility that has the potential to appease both landlord and tenant.
<< Latest news main page