Flexibility and Sustainability in Commercial Lettings - January 2024

An update on aspects of commercial letting practices considered in relation to the drivers of flexible lettings and environmental sustainability.

• Greater tenant turnover leads to pressure for increased freedom to carry out alterations, but also raises concerns over the environmental sustainability of frequent fit-outs and strip-outs.
• While ‘flexibility’ is often assumed to mean freedom to relocate, some tenants may prefer to negotiate the ability to reduce the extent of the demise rather than relocate completely. There are a range of possible legal routes to achieving this, but none are problem-free.
• As premises are re-let with increasing frequency, landlords are resistant to legal spend. Can they, or their agents, safely document lettings with no legal involvement?

Learning Objectives:

• To gain a critical understanding of how the ‘fit-out and strip-out cycle’ is accommodated within usual alterations clauses, and how such provisions may be impacted by the move to greater sustainability
• To understand the available options for documenting flexibility for occupiers to ‘downsize’ rather than relocate
• To appreciate the parameters for reducing letting costs by documenting leases without recourse to lawyers