Institutional Leases in the 21st Century

High levels of inflation in the 1970s helped form the institutional landlord's requirements of its property investments. By 1980 a recognisable form of letting contract for commercial property - the so-called "institutionally acceptable" lease - was in widespread use and continued to dominate market thinking for the next decade. But, since the commercial property market went into freefall in 1990, the "institutionally acceptable" lease has come under pressure from all sides. The 25 year behemoth with no breaks and upwards-only rent reviews has retreated before market demands for shorter, more flexible letting arrangements, the impact of legislation and the threat of more, unless the property industry offers this flexibility. Nevertheless, the "institutional" form that was in common use until the early 1990s will be found in the market for at least another decade. Property professionals, both lawyers and valuers, will have to recognise, understand and deal with them during that time. This book explains the evolution of the "institionally acceptable" lease and examines the main drivers for change that have emerged since the early 1990s, such as legislation on privity of contract, the introduction of Stamp Duty Land tac, the Commercial Lease Code and proposed changes in accounting standards. It also looks at some examples of the institutions' response to these pressures and how commercial property is let abroad. The book offers help and guidance about the salient points of the institutional lease granted 15 to 20 years ago to those who need to interpret it now, together with an explanation of how that lease differs from its modern counterpart. Finally, it offers the authors' view of why, although the investment property market is stronger than it has been for yeats, institutional lease terms loaded in favour of the landlord are nevertheless unlikely to make a comeback.Edwards, Chris is the author of 'Institutional Leases in the 21st Century ', published 2006 under ISBN 9780728205093 and ISBN 0728205092.