CLAS code of conduct: key points
Article Date: Jul 23 2007A set of voluntary guidelines for commercial landlords has become the core of the British Property Federation’s Commercial Landlords Accreditation Scheme (CLAS). In order to carry the CLAS logo, landlords must honour the rules summarised here, which were thrashed out in March by a consortium of business and Government representatives.
1. Lease negotiations
Landlords must make tenants’ rights and responsibilities clear in writing, and seriously consider alternative lease terms proposed by prospective tenants.
2. Deposits and guarantees
Tenants should be protected against the landlord going bust, and the conditions for releasing deposits should be set down in the contract.
3. Break clauses and renewal rights
Occupiers should be able to exercise break clauses providing they are up to date with their rent and leave behind no outstanding subleases. Similarly, their renewal rights should be respected unless warning is provided at the start of negotiations that this will not be possible.
4. Rent review
Alternatives should be offered to upward-only rent review where possible: for example, up/down reviews with a minimum of the initial rent, or with reference to a relevant index.
5. Assignment and subletting
Tenants should be able to assign the whole premises to another occupier where reasonable, and where the other occupier is of at least the same financial standing. If subletting is allowed, the sublease rent should be the current market rent.
6. Service charges
Landlords should offer their best estimates of service charges that might be incurred by the tenant. If they know about any upcoming events that might impact on service charges, they should let the tenant know.
7. Repairs
Tenants should only be obliged to leave the premises in the state they found them, and repairing obligations should be appropriate to the length of the lease.
8. Alterations to premises
Non-structural alterations should not need landlords’ consent, and should not need to be removed at the end of the lease.
9. Insurance
Where landlords are responsible for insurance, they should provide full details and disclose any commission they receive. Tenants should be able to suspend rental payments if the premises are damaged, whether that is by an insured or uninsured risk.
10. Ongoing management
Landlords should be open and prompt in their dealings with tenants and guarantors. They should provide a schedule of dilapidations six months before the end of the lease to allow occupiers to carry out any repairs.
This is a summary of guidelines from The Code for Leasing Business Premises in England and Wales 2007.
