Internet update

Citation

Almond, N. (2003), "Internet update", Property Management, Vol. 21 No. 1. https://doi.org/10.1108/pm.2003.11321aag.001

Internet update

Back in April 2002 Sally Keeble, the Under-Secretary for Housing, Planning and Regeneration, launched the voluntary Code of Practice for Commercial Leases in England and Wales. The code was launched to provide greater flexibility and choice in the commercial property market, following the failure of the first edition of the code, launched in 1995 to make changes.

Now, as I prepare this editorial in November, some seven months after its launch it appears that the profession is only just starting to get to grips with the Code, aided no doubt by recent reports in the property press. With the Internet being such an easy medium for publicising information to the masses, where on the Internet can you find more?

The code has its own Web site, found at www.commercialleasecodeew.co.uk The site is limited in its content, the key information being found by clicking on "documentation" which enables you to view two documents available in either a PDF or Word format. The first document, "Thinking of renting", is a two-page document aimed at businesses or individuals who are thinking about renting premises, providing in simple terms the risks in taking space under the headings of the term of the lease, guarantees, rental payments, rent reviews, repairs and alienation. For each a small paragraph is provided, including under term "If you agree a fixed term, you may have to meet all the obligations … until the lease ends". For most this is readily understood, and perhaps highlights that the aim of the Web site is for smaller businesses which have minimal representation in terms of acquiring space.

The other document is the Code of Practice itself. The Code comprises a total of 23 recommendations, ten of which relate to negotiating a business tenancy, and the remaining 13 to conduct during a lease. The document initially sets out all the recommendations, before setting out more detailed explanations later, although, for many practitioners, being told to "negotiate the terms of a lease openly, constructively and considering each other's views" (recommendation 1) is perhaps a little patronising.

For those involved in management, the final 13 recommendations will be of importance covering issues such as rent review negotiations, repairs, variations on a lease, service charges, repossessions and lease renewals. I shall spare running through all the points – those wishing to know more can view the Code online. Of interest to some will be the comments on service charges, which suggest that landlords should observe the Guide to Good Practice on Service Charges in Commercial Property – more on this guide is available at www.servicechargeguide.co.uk

Considering the importance of the Code, the Web site is limited in its scope. It provides little information on what the Government's intentions are, or indeed anything on the monitoring process, except to say "The success of the Code will be judged by a monitoring exercise to take place over the first two years of its life. This exercise, to be overseen by the DTLR, will report at the end of this two-year period on how effective and useful businesses and the property industry have found the Code". The reality is, if after the first year the Government does not see any flexibility being provided, then it will begin to set the wheels in motion for legislation which will either continue or halt depending on the details of the final report and evidence provided to support the code, including information supplied by third parties and those involved in transactions themselves.

Two of the supporters of the code are the Royal Institution of Chartered Surveyors (RICS) and the British Property Federation (BPF). Turning to the RICS Web site (www.rics.org.uk) provides some further information, although you will need to search to find it. Given the importance of the Code, you would think there may be a separate section – instead all I found when searching was a link at the bottom of the page to the lease Code Web site. Undertaking a search of the site using the term "lease code" did provide 108 links to documents on the site, including press releases and a series of articles, which have been reproduced from the Estates Gazette. While useful, sifting through all these pieces of information is time-consuming.

The BPF Web site (www.bpf.org.uk) provides some additional information which is available by clicking on the "Publications" link at the bottom of the page. The main feature is the online monitoring pro forma. This enables those involved in the leasing of property to submit details to the BPF that can be used as supporting evidence to demonstrate that greater flexibility is being provided. The key details required include details on the initial terms offered and the final agreed heads of terms together with some other questions on the pricing. If this is to be used more, then this site needs to be publicised more widely, or indeed placed on the lease code Web site itself.

Although not directly related to the Code, the BPF also has a couple of documents on leases, including an online "short commercial lease", and a consultative document for model clauses of the office FRI lease. Both of these are accessible from the publications page outlined earlier.

Finally, on an academic level, it is worth visiting the Department of Real Estate and Planning home page on the University of Reading Web site (www.reading.ac.uk/AcaDepts/kl). Taking the departmental publications link, and then research reports, will take you to a list of reports including one entitled "Lease structures, terms and lengths: does the UK lease meet current business requirements? A report on the attitudes of occupiers in the UK". The report highlights some of the inflexibility within the marketplace, in particular the gap between what occupiers want, and what is often on offer, and provides a useful background to why we now have the Code in practice today.

Given the importance of the Code to the profession, it seems a shame that the Internet has not been exploited as fully as possible in providing information on the code. While searching is all very well, it would have been even more useful to have had one single resource online to which the profession could turn – perhaps the lease code Web site will develop further in the future?

Nigel AlmondSenior Researcher, Jones Lang LaSalleNigel.Almond@eu.joneslanglasalle.com