Things to Consider Before Signing a Green Lease

March 28, 2022

Signing a green lease agreement for a commercial property with Summit Properties

Green leases or green lease provisions are becoming more common in Ontario, with sustainability making its way into more commercial lease agreements. These green leases are a way for property management companies, landlords, and renters to work toward energy efficiency, though it’s important to know your responsibilities as a tenant and know how it affects your lease. 

What Is a Green Lease?

A green lease works to improve the energy efficiency of a commercial property with an agreement between the tenant and landlord or property management company. With a green lease, the tenant and the landlord share responsibility and the cost of sustainability upgrades to the commercial building. Environmentally conscious decisions like waste reduction, recycling, water conservation and energy efficiency all cost money to implement, though sharing the burden of those costs helps them get implemented and helps ensure compliance while saving on reduced energy costs. 

Questions to Ask Before Signing a Green Lease

Green leases are fairly new to Canada so it would be no surprise if you’re unfamiliar with what they may mean to your budget and responsibilities as a business. It’s important that you ask the right questions when signing a lease on a new commercial property to fully understand what is included in the green lease, and your responsibilities.  

What Are My Responsibilities as a Tenant?

As a tenant on a green lease, your specific responsibilities will be outlined in your commercial lease. They may include a benchmark on energy efficiency, and what cleaning products can be used. There may even be an incentive written into the lease that rewards you for meeting the energy usage benchmarks. In return, you will have a rented space that runs more energy-efficiently. 

Waste reduction measures and a commitment to recycling may also be written into the green lease. Make sure you ask about your financial commitment to these environmentally friendly practices, so you’re not surprised by extra monthly costs.  

What Are the Landlord’s Responsibilities?

Landlords still must ensure the building is safe and clean, though, with the green lease, they are committed to achieving pre-set environmentally friendly and green goals. Landlords are responsible for the building maintenance and following the same procedures in common areas that you’re required to in your space, with added goals of energy efficiency in the building, as well as using greener products and green cleaning procedures when maintaining the building.  

What Are Green Cleaning Procedures?

It’s important to ask about the green cleaning procedures of the common areas and your responsibilities to adhere to appropriate green cleaning procedures in your commercial space. In a green lease, often certain cleaning products are recommended to ensure products being used are non-toxic and environmentally friendly. 

What Are the Current Energy Benchmarks for the Property?

Before signing a green lease agreement, ask about the current benchmarks for the property, and ask how they’re measured and monitored. Often, there is an annual audit performed that details energy usage and other environmentally friendly practices. 

How Does a Green Lease Affect My Utility Bills and Expenses?

A green lease may have extra costs involved at the beginning of the tenancy; however, you’ll quickly benefit from lower energy costs, lower water or gas bills, and cleaner air in your space. Ensure you understand what costs you’re responsible for, how they’re split between you and the landlord, and any penalties for not reaching the benchmarks.  

Learn more about Commercial Green Leases with Summit Properties

Contact Summit Properties to learn more about the availability of green leases for commercial spaces in your area. Our experts have professional knowledge to help you understand your responsibilities as an Ontario business owner and how they affect your bottom line.