It’s a bubble without the onus of a sub-prime property, but within the emerging green building industry, green leases may entail risks not previously considered with conventional commercial properties.
For instance, consider certification requirements. A green space often must satisfy an applicable LEED for Commercial Interiors certification level. Landlords can find such a requirement difficult to comply with, and they certainly can’t guarantee compliance to the standard that many government agencies might request. Others involved with the property such as the project architect, general contractor, and subcontractor all would be more informed about whether the space meets the required certification level. The landlord would need to communicate directly to understand the issues and arrive at compliance. Consequently, perhaps with the help of a competent attorney well-versed in commercial real estate matters, any landlord will need to protect himself in any project contracts which are applicable. The landlord and tenant are obliged to work together in preparing a well-crafted lease that can protect each of their respective interests and avoids liability that may conceivably arise from outside influences. Another nice touch might be built-in lease incentives, such as free rent periods or rental abatements. These kinds of incentives can help a property owner deliver a green lease space without undue penalty.
It’s also good to know that green building usually is more expensive and time-consuming than conventional construction. This can be important when figuring out tenant improvement allowances spelled out in the lease. Green space is a nice concept and all, but not if it remains a hypothetical. The bottom line is that a finished space is the real goal for a builder – green or not.
Another consideration is that any improvements should be insured – and not only minimally. With insurance, more is often better when future liability is being considered. Remember that so-called green building materials will also jack the price up, compared to conventional building products. The use of certain green building products can also create unexpected snafus for both the landlord and tenant.
Article Directory : http://www.articlecube.com
