Thursday, March 19, 2009

What is a "Green" lease?

A “green lease” is one that seeks to encourage sustainable practices by both the landlord and the tenant and to remove disincentives to increased recycling, reduced raw material, energy and water consumption, as well as the use of sustainable materials in tenant improvements. Ensuring that tenants and landlords are required or strongly encouraged to adopt environmentally friendly practices is the purpose of such a lease. One commercial landlord oriented green lease* states its objectives this way:

The Tenant acknowledges the Landlord’s intention to operate the Building so as to provide for:

(a) a comfortable, productive and healthy indoor environment;
(b) reduced energy use and reduced production, both direct and indirect, of Greenhouse Gases;
(c) reduced use of potable water and the use of recycled water where appropriate;
(d) the effective diversion of construction, demolition, and land-clearing waste from landfill and incineration disposal, and the recycling of tenant waste streams;
(e) the use of cleaning products certified in accordance with EcoLogoM (Canada), Green SealTM (United States) or equivalent standards;
(f) the facilitation of alternate transportation options for individuals attending at the Building; and
(g) the avoidance of high volatile organic compound materials, furniture and improvements within the Building and individual tenant premises.

The lease goes on to specify how this is to be done, the related responsibility of each party, the metrics and methods to measure compliance, the allocation of related costs, and how it is to be enforced.

* The lease, entitled “REALpac National Standard Green Office Lease for Single-Building Projects – 1.01 – 2008,” was developed by the Real Property Association of Canada, and can be seen in its entirety at

COMING NEXT: How do most leases now discourage being green?

With over 35 years experience Stu Heller helps his clients understand and improve their business and real estate transactions. His blogs on leasing can be found on Blogspot, WordPress, Squidoo and Hubpages, and his “Superb” attorney rating and profile on He is an allied member of the Washington Restaurant and the Washington State Hotel & Lodging associations, as well as a member of the King County and Washington State bar associations. Contact him for a free initial consultation or to get his Legal Tips emailed to you or others you work with. Be sure to consult your lawyer before applying any of the above to a particular situation. Contact info: Stuart A. Heller, 1325 Fourth Avenue, Suite 940, Seattle, WA 98101, 206-623-0579, fax 206-682-7972,,, ©2009, Stuart A. Heller, all rights reserved.


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Sounds like something we could use a lot more of. If we considered the environmental factors before using land we'd all be in a much better place.

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Priscilla said...

This is an excellent blog, in particular for raising concerns for environmental impact in the business context. However, it seems as though much of the discussion of "green" leasing, including this blog, involves commercial leases only. Do you think that "green" leasing is feasible for residential tenancy agreements also? What do you think, are the challenges in this area?

I am part of a group generating discussion on this topic, and we would love it if you could contribute to our draft green lease, here

Kindest regards,

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