CRC clauses for leases

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A set of draft clauses dealing with landlord and tenant issues arising under the Carbon Reduction Commitment Energy Efficiency Scheme is attached below. Somewhat conversely, they are not currently recommended for use, and have not therefore been included in Property PSL standard leases.

From a risk management point of view, it may not be advisable to include CRC clauses in leases until the property market has given a clear indication as to what it expects in terms of the passing on of the cost of CRC to tenants, and the drafting to include as standard in new leases. The British Property Federation has twice consulted with the property industry in relation to CRC – most recently in its paper of December 2009: CRC Industry Consultation - with a stated aim of attempting to arrive at standardised CRC drafting. In the March 2012 Budget, the Chancellor of the Exchequer intimated that he might scrap the scheme in Autumn 2012 if considerable administrative costs savings could not be found.

The draft clauses attached below are therefore provided on that understanding. They may be considered for use for a landlord client who has a clear and immediate requirement to pass on the cost of CRC to tenants.

Any queries or comments regarding these clauses are gratefully received via the contact button at the top of the page.

A drafting note is also included.

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