THE relationship between tenants and landlords has never been more harmonious, despite the economic downturn.
The voluntary good practice guide for business leases, introduced a year ago, has brought greater flexibility to the commercial letting market, which has in turn reduced disputes between commercial tenants and landlords.
The guide, known as the Commercial Lease Code, aims to promote fairness by encouraging greater transparency, as well as flexibility, when agreeing the length and terms of the lease.
It aims to put tenants on an equal footing with landlords when negotiating lease terms. The code advises that landlords include a number of clauses in the contract covering everything from service charges to repairs and insurance.
For this reason, I am a strong supporter of the use of the code in commercial property transactions.
The code was amended last year and the Department of Communities and Local Government is currently monitoring its success so far.
A dozen trade bodies have collaborated over this, including the British Property Federation, the Confederation of British Industry, the Royal Institute of Chartered Surveyors, and the British Retail Consortium.
Although the code is voluntary, many landlords have chosen to take it up over the last two years, which is very positive.
Commercial leases are extremely complex, which is why they often lead to disputes, so anything that helps to make the process more transparent is good news.
The intention is that landlords inform prospective tenants if they are not complying with the code and give their reasons for this, although it is generally recognised that not all leases can fit in to this predetermined format.
Even if the landlord in question is complying with the code, tenants should always consult their commercial property team.
The code recognises a need to increase awareness of property issues, especially among small businesses. And it seems to be working as we are seeing fewer legal disputes between tenants and landlords.
