Question two:
What are your views about the voluntary Code for Leasing Business Premises in England and Wales 2007, the Law Society Business Lease, and the British Property Federation Business Lease? Are you aware of these? If so, have you ever used any of the above leases? Please explain.
The vast majority of the lawyers (over 80%) interviewed stated that they have never used the Code, the Law Society Lease or the BF lease. Some stated that the aforementioned are not benefiting the tenants that they are intended to do so.
Lawyer’s Response to question 2:
Lawyer C A said:
Views on the Code, some of our landlord clients make great play of being Code compliant - but I’ve yet to see leases with up and down rent reviews, although we do see rent increases according to the retail price index. The Code doesn’t reach the little tenants which it is meant to protect - they just don’t know enough to ask for Code compliance […]
Code…mm.. if there is reference to it or negotiations in the light of the Code those take place before the deal gets to us to put in place. It would be dealt with by agents […]
Law Soc business lease - never used and I seem to remember technical reservations about it but so long ago I can’t remember what they were […]
BPF lease - not bad and we have used it in the past - but only for short, cheap lettings as there is not a full form rent review.
Comments
C A said the voluntary codes are not being applied in the leases. In commercial property leases, the rent increases nowadays are more frequently linked to the RPI, which is the retail price index. She strongly asserts that the Code does not reach the tenants that the Code is meant to protect. The venerable tenants, specifically the
ethnic minority tenants, just don’t know about the code. This concurs with the findings of the literature review that the awareness of the code is quite low. She expresses her reservations about using the Law Society Business Lease. She says that they use the British Property Federation lease only for cheap lettings with no rent review.
Lawyer KR said:
I am sceptical about the value of codes and sometimes see as a “one size fits all” solution and as such can be a substitute for thinking about how best to deal with particular circumstances […]
It is okay but in very limited circumstances where it is not cost- effective to negotiate documentations in detail and both parties understand and accept its limitations […]
The Law society Business Lease? Yes but very rarely and not at my instigation.[…]
The British Property Federation Business Lease? I don’t remember it.
Comment
K R expressed that due to extreme time constrains upon him, he would only give a short answer to each question. Referring to the Code, he said that he was sceptical about the value of the Code. Referring to ADR (alternative dispute resolution), he asserts that they can be cost effective in circumstances when it is not cost effective to negotiate through solicitors and court. He very rarely has used the Law Society Lease and he does not even remember what the British Property Federation Lease is.
Surveyors/Agents Group:
Over 70% of the surveyors/agents categorically stated that they either had not used the Codes, the Law Society lease, or the British Federation lease, or have come across them. In particular, some were blatantly using the word NO to the question.
Surveyor N A said:
In the real world of small businesses and smaller transactions the Code is not even mentioned. My view is that it is interference with market forces. If the institutions want to use it then fine
Comment
During the interview, N A expressed resentment against the code. He asserted that all the voluntary code does is unnecessary interfere with the market forces in the commercial property industry.
Landlords Group response to question 2:
Over 84% of the landlords said that they did not know about the Codes, the Law Society Lease or BF lease and/or had never come across them.
Ethnic Minority Landlord A N said:
I have no awareness of any code. I will look them up’ ‘I, never neither used the code, nor the Law Society Lease nor the BP Federation lease
Comment:
Mr A N response to and awareness of the use of the codes, the Law Society Lease and the British Federation Lease is quite similar to other ethnic minority participants within the groups.
Lawyer M regarding the Law Society Lease:
It appears to be a good standard contract, which complied with the code and could save both parties time and money during the negotiation process. It would probably be more
beneficial in low value, short term lease with no unusual circumstances.
Tenants Group:
Out of the twenty-eight tenants interviewed, twenty-six confirmed that they have never heard of or use the Codes, the LS Lease or the BPF Lease.
Business Owners Group
Out of fourteen business owners interviewed, only four stated that they knew about the Code, the LS Lease and the BPF Lease, although three were only aware of it. Eleven of the participants neither knew of them, nor ever used them. Chart 2 shows the participants’ response to question 2 above.
Chart 2: Participants Opinion of Codes and Variable Leases
0 10 20 30 40 50 60 70 80 90 100
Lawyers Surveyors Landlords Tenants Owners
Pa rt ic ip an ts R ema rk s i n % Participants Groups