Green leases framework

This guidance has been created to help organisations to improve the green credentials of their leased estate. It has been designed with professional legal support from Bevan Brittan and acknowledges that organisations will be at different stages of their green journey.

The guide is comprised of three core sections:

Memorandum of understanding; this is designed for organisations wishing to engage with their landlord to discuss the possibilities about greening their estate.

Suite of provisions; this is designed for organisations wishing to make changes to improve the green credentials of their leased properties.

Clauses; a drafted set of clauses which are designed to facilitate more detailed discussions with your organisation’s own property or legal teams.

Specific and specialist advice will need to be sought for any listed leased properties on your estate. You should consult your internal property team(s) in the first instance.

Memorandum of understanding

Use the template provided to create your tailored memorandum of understanding with your landlord. Once the document is signed by both parties it acts as a way of allowing organisations to speak openly with the landlord about changes they wish to make across their leased estate and explore feasibility.

The Memorandum of Understanding is intended for use where there is an existing lease or agreement in place. It also provides a useful stepping-stone towards a greater understanding of green leases more generally and allows the green ambitions of landlords and tenants to be aligned. It is intended to be used where the landlord and the tenant have not included green lease provisions in their property arrangements previously. It is not legally binding but instead sets out a framework of intention(s) and co-operation on green issues between the landlord and the tenant.

The document is based on the Better Buildings Partnership (BBP) memorandum. However, specific NHS provisions have been added to aid with basic organisational benefits e.g. the sharing of energy data and the need to achieve NHS net zero carbon targets.

Suite of provisions

The green lease suite of provisions provides an essential checklist setting out a series of green obligations and provisions which can be included within any commercial lease. As the nature of buildings, organisational ambitions and landlord-tenant relationships differ across the NHS, there is no ‘one size fits all’ set of provisions. The provisions set out in this section try to address a broad range of possible options to allow organisations to tailor their provisions to suit their individual circumstances.

The provisions are categorised into light green provisions or dark green provisions:

  1. Light green interventions allow entry level changes to be made which help the organisation toward achieving their carbon reduction targets. These are less onerous, and usually do not have a financial impact on the parties to the lease; and
  2. Dark green interventions allow organisations to focus on more substantial interventions which drive significant carbon reductions. These are more onerous and may well have a material financial impact on one or more of the parties to the lease.

You can select provisions from both the light green and dark green columns, to create a tailored suite of provisions suitable for your organisation’s level of carbon reduction ambition. Responsibility for implementation and monitoring of these provisions should be considered and agreed as part of the new lease formation or lease review process.

Provisions list

This list suggests areas within a lease or agreement that could encompass environmental obligations. Not all of these matters will apply in all cases because individual circumstances for each lease will differ. Organisations can select provisions from both the light green and dark green provisions, to create a tailored suite of provisions to meet their level of carbon reduction ambition. Please consult your legal team or legal advisors if you are in any doubt as to the applicability of the individual obligations or for further advice.

Lease clause “Light green” provisions “Dark green” provisions
  • Green obligations to be best practice only.
  • Green obligations to be legally binding on parties to the lease or to be incorporated within Service Level Agreement or Memorandum of Terms of Occupation.
Rent and Rent Reviews
  • Tenant’s environmental improvements to be disregarded on rent review.
  • Rent increase if Tenant fails to meet specified energy reduction targets, based on accurate sub-metering data.
  • Rent reduction if Tenant meets energy reduction targets and/or Landlord fails to meet energy reduction.
  • Assumption that premises have target EPC rating on rent review.
  • Tenant/Landlord to keep plant/equipment in efficient working order.
  • Landlord to waive dilapidations claims for plant/equipment if it is due to be replaced under Landlord’s estate energy efficiency plan.
  • Tenant obligations to use repairing materials from sustainable sources.
  • Tenant is not to carry out alterations which may have adverse impact on EPC rating or environmental performance of the building.
  • Landlord is entitled to install energy saving equipment in the building.
  • Tenant not required to reinstate alterations at end of lease term where this would adversely affect environmental performance of the building.
  • No amendments to existing provisions.
  • Consider whether Tenant is only permitted to assign/underlet to an organisation who can demonstrate good environmental sustainability credentials.
Energy Obligations
  • Landlord and Tenant to share data on energy consumption, where it is available.
  • Landlord/Tenant to install separate metering facilities for individual utilities, with installation costs agreed between Landlord and Tenant.
  • Tenant to be prohibited from installing plant/equipment which will reduce environmental performance of the building.
  • Tenant to co-operate with Landlord in improving environmental performance of building.
  • Landlord and Tenant to agree on and implement environmental management plan for building.
  • Right of lease forfeiture if persistent failure by Tenant to comply with site/building management plan.
Environmental Management
  • Landlord to establish an environmental forum for all occupiers of the building.
  • Obligation on environmental forum to meet periodically to review environmental management plan for building and ensure maintenance services are aligned with sustainability targets.
  • Tenant to comply with sustainability best practice set out in Landlord’s estates regulations or policies.
Service Charge
  • Principles of good environmental practice to be applied by Landlord in managing the building.
  • Landlord to consider introducing an environmental management system for the building.
  • Service contractors to use environmentally friendly products in carrying out services.
  • Landlord to include cost of implementing EPC recommendations in service charge.
  • Cost of regular environmental audits (at agreed frequency) to be included in service charge.


In order to support each of the provisions, a suite of outline clauses have been drafted. These are designed to be used for new leases, either on lease renewal or new lettings. These can be used to support discussions with your property teams in order to make the required changes to  leasing arrangements with respect to carbon reduction measures.

The green lease clauses act as a bolt-on schedule within a new lease or during a lease renewal. They are designed to align with the PLC model form lease of part of office premises; the most popular template lease used by solicitors in drafting commercial leases. Some landlord services providers, such as NHS Property Services (NHSPS), have non-legally binding Service Level Agreements or Memorandum of Terms of Occupation. This guidance can also be used to discuss options to include green clauses, with these agreements.

Both the Memorandum of Understanding and the green lease clauses are intended for use in multi-occupied buildings where the landlord retains responsibility for maintaining both the fabric of the building and the common areas. Any green lease clauses for other leases would need to be changed to fit their specific circumstances.