22/05/2025
Insights
Having our own space dedicated to educating each other and collaborating in new ways, we were excited to host a session on dilapidations, sustainability, and whether we can change the “strip out and fit out” culture within our dilapidations sector.
Chaired by Chi Collins and Alex Hutchings of Greenwoods Legal LLP, the panel attracted many people from the surveying, sustainability, legal and investor worlds, all interested in furthering a greener agenda.
The Model Commercial Lease
Understandably, the conversation revolved around the purpose and effectiveness of the model commercial lease. This has been both the reason a lot of spaces are stripped out on lease expiry, as well as the key to improving the accountability of tenants and landlords.
Most leases begin as MCLs then are watered down (Alex Hutchings spoke of clients who “try to be sustainable, where it is economically viable”). But it was understood across the panel that stripping out to the shell and fitting in a new but not dissimilar style was, one of if not, the most wasteful parts of the process. The panel pointed out that most leases encourage and require this pattern of behaviour.
Be more Gail’s
Naturally, the topic then changed to who or what is doing a great job, and amongst the naming and shaming, chain bakery GAIL’s was highlighted as a company that strives to keep as much of the previous tenant’s fitout as possible, with a “light impact” approach.
Laura Noctor-King of Better Buildings Partnership spoke of her experiences across the sectors, adding that physical evidence was a priority for brands in a world where messaging is fleeting. Designing a shell, she added, is an architect’s dream, which doesn’t help to curb leaseholders’ fitout restrictions.
Alexia Laird of Landsec agreed and went further to explain that they are often asked to deal with the waste of a strip out, creating distance between the tenant and the waste. However, she went on to add, if the kit is good and they have good management records, they will retain it. But standardisation in clauses and leases is essential in being able to more regularly keep those components.
Alex Hutchings commented that most leases have obligations for the tenant to keep and maintain kit in good order, but this is rarely enforced. This could go some way in actually preserving that kit to avoid wastage.
The small stuff
Andrew Mazin, of Sanderson Weatherall, was keen to stress a surveyor’s point of view, representing the group who are often appointed as the go-between. “There is so much to focus on,” he said, with Eddisons’ Ian Harrington mentioning a few instances where the smallest of changes were deemed necessary by the tenant’s marketing and branding function. Nazar Soofi, Eddisons’ Head of Sustainability and Decarbonisation suggested that marketing teams were the ones that needed the education on sustainability because all too often, they are the ones making decisions on the look and type of fit out so that it is on brand.
Simon Matley, head of dilapidations at TFT, suggested there needed to be an update to reinstatement clauses, with Chi Collins adding that lawyers could write new clauses about early dilapidations restrictions or even agreed amounts. She added that the Pre Action Protocol for Dilapidations could be used and expanded to require parties to reduce waste, given that nearly all representatives in this field adhere to the protocol. This wouldn’t require primary legislation and could be a relatively quick and effective way of forcing the parties to address sustainability.
Simon Matley and Pinsent Masons’ Siobhan Cross discussed a theoretical plan to lease space with the existing fit outs. Andrew Mazin argued that agents don’t want to show spaces with ‘old’ features in it, but Tim Clarke, founder and CEO of Harrison Clarke suggested that we were treating people like children and that we should give them “a bit of slack”. Chi Collins agreed and described “buying a house, looking at people’s furniture and taking a view – why can’t we do it commercially?”
A new chapter
All panellists agreed that new clauses would ultimately help to incentivise keeping fitouts and deter stripping out entirely new fittings. Instead of treating property as a product, Alex Hutchings imagined viewing property as a service, where the lease was built and adhered to like a subscription.
Although these were simply ideas, it was clear that everyone believed that the narrative needed to be changed, and since the government agenda has nothing on this yet, it may be in the hands of one of the big commercial landlords to make the first big step.
