"At the heart of a sustainable lease is a commitment to energy performance. Tenants and landlords can agree to minimum energy standards, for example, requiring a building to be Energy Star certified, (Operations and Maintenance) certified, or to meet a defined electricity consumption target in kilowatt-hours per square foot. By building these requirements into lease language, both parties share responsibility for performance and can incentivize upgrades."
"Incentives also matter. A lease could include retrofit allowances or rent credits tied to energy-saving improvements. For example, if a tenant pays for more efficient HVAC systems, they might receive a rent reduction or cost-sharing from the landlord. These provisions encourage capital investments that reduce energy use over the life of the lease. According to research from the Institute for Market Transformation , green leases have the potential to enable over 17% of site energy savings in office buildings."
"Sustainable lease agreements should also address water and waste, two resource streams often overlooked in traditional contracts. Tenants and landlords can agree to water efficiency targets, such as installing low-flow faucets, dual-flush toilets, waterless urinals, or collecting greywater for irrigation or toilet flushing. These systems lower utility bills and contribute to conservation. Waste management is equally crucial. A green lease can establish waste diversion goals, committing both landlord and tenant to recycling, composting, and safe disposal of specialty or hazardous waste."
Sustainable lease agreements embed energy, water, and waste performance requirements into commercial contracts to align landlord and tenant responsibilities. Energy provisions can mandate standards like Energy Star or defined electricity consumption targets and include incentives such as retrofit allowances, rent credits, or cost-sharing to encourage capital investments. Research indicates green leases can enable significant site energy savings. Water measures include low-flow fixtures and greywater reuse to lower bills and conserve resources. Waste clauses set diversion goals for recycling, composting, and safe disposal of specialty waste. Green leases also reduce operational risk, lower utility costs, and improve indoor environmental quality and corporate reputation.
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