Breakfast meeting, London 6 December 2011 - Clarity in property transactions

A plain English lease attracted a record turnout to a Clarity breakfast in London on Tuesday.  Clive Ashcroft, Head of Legal Services of Land Securities, and Keith Hutcheson, a solicitor in Nabarro’s Commercial Property team, together described their experience of developing and launching the Clearlet lease, used so far in more than 300 leases of mostly retail premises.

Call for suggestions to improve Clearlet

The Clearlet terms, first drafted by Nabarro and developed with Dundas & Wilson and Eversheds (Land Securities Panel firms) are reviewed regularly with tenants and, as often as possible, their lawyers. Clearlet terms are not copyright-protected; all are welcome to use them. Please do join the development process, to keep the drafting clear and customer focused, and help to develop a full suite of innovative leasing documents. Send comments / suggestions to the drafting team through clive.ashcroft@landsecurities.com or keith.hutcheson@nabarro.com.

Discussion at the breakfast

Here are some of the points made at the breakfast:

·         The drive for a new lease came, not from the lawyers, but from the client’s demand for:

o   a shorter, cheaper process.

o   a lease that would appeal to the business tenant as a customer.

o   more readable terms, so that not only the tenant’s property director but also each shop manager is clear as to what they can do and, perhaps more important, what they can require from the owner.

·         The lease contains points previously conceded in the 2nd or 3rd round of negotiations. Trivial points were deleted.  The main substantive rights and duties did not change much.

·         The Clearlet lease is about one-third shorter than its predecessor and saves about one month in the time taken to complete a standard transaction.

·         ClearLite, an even shorter but still fair version, is designed to allow deals of a year or less to be signed and returned by the tenant, within a day if necessary.

·         Consultation with tenants and their representatives led to further change on points that mattered to them: for example, setting time limits for the landlord to give a consent, after which consent is deemed to have been given.

·         Prospective tenants of large spaces in London office developments have not yet embraced Clearlet as retail tenants have done.  There is still the feeling that you need a bigger document to reflect a big deal.

·         The British Property Federation is working on a similar initiative to produce a short form lease, and the City of London Law Society are supporting standardisation of Certificates of Title.