By Andrew Kilpatrick BSc FRICS ACIArb IRRV, Partner of Thompsons

Understandably, all the recent news headlines have concentrated upon the residential property sector and the will they/won't they/how can they conundrum around the introduction of HIPs and EPCs (Home Information Packs and Energy Performance Certificates if you have been on Mars for the past few months!); (Also known as how to clog up and slow down the house selling process with red tape and bureaucracy and leave Joe Public with another bill!). Whilst all this has been going on, you may have missed some new developments in the commercial property field, such as the new Code for Leasing Business Premises. The Code, whilst currently voluntary, recommends that landlords, if requested, should give prospective tenants priced alternatives to standard lease terms on items such as lease length, break options, non-standard rent reviews, exclusion of Landlord and Tenant Act security, etc.. The new Code comes in three parts, a two page landlord code, a step by step guide for tenants and a checklist of heads of terms for lease negotiations. The Code is endorsed by leading property organisations including the RICS, British Property Federation and the British Retail Consortium as well as the CBI and Federation of Small Businesses, amongst others.

Also new to the commercial property sector is an RICS Code of Practice on Service Charges in Commercial Property, introduced from April 2007. This Code sets out in some detail recommended good practice for running service charges with the aim of introducing an industry standard code of practice. Andrew Kilpatrick of Thompsons says “whilst the Code is not mandatory, tenants have a right to expect landlords to run service charges properly and in accordance with good practice and the principles of transparency set out in this Code. Whereas in the past, most leases provided that the landlord's surveyor would have the last say on any queries on disputes or cost apportionments, the Code, if incorporated into a new lease, provides for dispute resolution by an Independent Expert.”

If that was not enough, there have also been new changes to fire regulations, asbestos regulations and new legislation on the way relating to lease forfeiture and distress, introducing a new statutory scheme for commercial rent arrears recovery, all of which changes making it more important than ever for owners and occupiers of business property to get the best available up to date commercial property advice.

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