Covering all aspects of rental, from negotiations and deposits to rent reviews and sub-letting, it is hoped that the code will be used as a checklist for negotiations before a lease is granted, as well as lease renewals.
“The code is an important document because it clearly outlines the way landlords should act toward tenants. We hope it will discourage the kinds of sharp practices which some retailers, particularly those at the smaller end of the scale, have been subjected to in the past,” says a spokesman for the British Retail Consortium (BRC).
There are ten main points covered in the code, which has been designed to improve relations between landlords and tenants.
Among the first is that landlords must make written offers clearly stating the main terms to be included within the lease. This covers rent, length of lease, rights to break, whether the tenant will have security of tenure, the rent review arrangements, rights to assign or sublet and the tenant’s repairing obligations.
Landlords must clearly state if the tenant is not to have security of tenure under the Landlord and Tenant Act 1954, and the only pre-condition for a tenant to exercise a break clause should be that they are up to date with rent.
Subletting, if allowed, should amount to the market rent at the time rather than the rent passing under the headlease.
Guarantors are also included with the code proposing that these should only be used if the proposed assignee is of a lower financial standing than the assignor.
“As this code is voluntary there is no guarantee that we will see it translate into action on the ground and I’m sure some tenants will remain sceptical. There is now awareness in the property industry that if the code is not widely accepted, legislation will almost inevitably follow,” concludes the BRC.