Green Lease Clauses – Odhran’s Clause

31/01/2023 07:53:56

The Chancery Lane Project has published a suite of green lease clauses for use in commercial leases in Ireland.

With the increased focus on Environmental Social and Governance (ESG) factors in real estate transactions, green leases are becoming increasingly important. Green leases are leases incorporating clauses which promote the sustainable operation and management of buildings.

The Chancery Lane Project (TCLP) has published a suite of green lease clauses for use in commercial leases in Ireland. TCLP is a collaborative effort of lawyers from around the world working pro bono to develop new contract provisions to help fight climate change. These clauses are available on TCLP’s website for colleagues to use in their leases of commercial property in Ireland, subject to the terms of use.

About the clauses

The clauses are divided into the following three sub-sets:

  1. clauses promoting cooperation between landlords and tenants in relation to the environmental performance of buildings (Odhran’s Clause);
  2. repair and alteration covenants, rent review assumptions and covenants for the protection of energy and sustainability ratings (Emily and Tom’s Clause); and
  3. clauses incorporating circular economy and sustainability principles into a service charge regime, landlord’s regulations and landlord’s works (Amélie and Lauri’s Clause).

The clauses are drafted primarily for a lease of new office premises within a multi-let building where the tenants contribute to the maintenance of the building common areas via a service charge regime. Some of the clauses may be suitable for use in leases of other types of premises. The clauses should be treated as a menu, from which landlords and tenants can select clauses that are suitable for their premises and their appetite for sustainability measures. 

The clauses were produced by the Irish Property Working Group of TCLP, led by Dearbhla Considine of Arthur Cox LLP, Sinéad Counihan of Mason Hayes & Curran LLP and Judith Cryan of ByrneWallace LLP. This group comprises colleagues from six Irish law firms and includes members of the Law Society Conveyancing Committee Landlord and Tenant Task Force.

Colleagues are advised that the sample clauses are not to be treated as precedents and are for negotiation in every individual case.

Today’s eZine article by the Conveyancing Committee will focus on Odhran’s Clause. Emily and Tom’s Clause and Amélie and Lauri’s Clause will be looked at in more detail in future eZines.

Odhran’s Clause

Odhran’s Clause includes:

  • co-operation provisions whereby the landlord and tenant agree to cooperate with each other to identify appropriate strategies to improve the environmental performance of buildings, including the implementation of an environmental performance plan, managing waste and sharing data;

  • provisions for the setting up of a building management forum to agree strategies for sharing environmental performance data, agreeing targets and strategies and reviewing the environmental performance of the building and the premises demised by the lease; and

  • provisions in relation to accessing the demised premises and metering the tenant’s energy use.

Environmental laws and practices are constantly changing as governments, businesses, NGOs and individuals seek to find solutions to climate change. These clauses are likely to evolve and change over time to reflect changes in law and practice.

Further information

Further information on the TCLP green lease clauses will be included in the next two editions of the Law Society eZine and the March 2023 edition of the Law Society Gazette.