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So slow to crackcode.

Byline: Ian Mcneal

Take-up by tenants of a new commercial property code of practice has been slow, according to research by a North-east surveyor.

Property consultant Gerald Eve said 76pc of tenants have never introduced the principles of the Code of Practice for Commercial Leases in England and Wales to lease negotiations.

The code aims to provide a more flexible commercial property market by recommending commercial property owners provide choice of leasing terms.

The firm's survey examined the views and experiences of tenants, landlords, investors, developers and advisers, to identify awareness and usage of the voluntary code of practice.

Despite high levels of awareness among business occupiers, the Government is considering legislation to make the code of practice mandatory.

Yet the survey shows landlords are already initiating use of the code in lease negotiations and, in fact, are more likely to refer to the code throughout the life of a lease than tenants.

Landlord and tenant responses to the survey are consistent with each other, confirming the view that cost is the central issue and tenants will not necessarily pay for flexibility.

Andrew Tucker, partner at Gerald Eve, says, "The code is neither a huge success nor a huge failure. Respondents tell us that there's a 50/50 chance of successfully implementing the code's principles.

"So it's simply too early to say whether landlords are holding all the cards in negotiations.

"The code is designed to support tenants in negotiations, but they just aren't using it.

"The code needs to be tested far more rigorously by tenants and landlords alike before the Government risks legislating for its mandatory use."

Contrary to stereotypical views of inflexible landlords, the majority are receptive to the code's principles. A significant majority of landlords, 92pc, are willing to adopt the principles without legislation.

The more significant a landlord's property holdings, the more responsive they are to flexible leases.
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Copyright 2005 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Property Commercial
Publication:Evening Gazette (Middlesbrough, England)
Date:Jan 11, 2005
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