Members of the property industry are meeting in Brighton and Hove this week to discuss lease reforms.

The Investment Property Forum (IPF) is an industry think-tank backed by pension funds, property companies and institutional investors and has its annual conference in the city every year.

On the agenda this year is the progress of the code of practice for commercial leases, a project backed by the British Property Federation (BPF) in response to government concerns that tenants are getting a raw deal on commercial property.

The Government has threatened to legislate to ban upwards-only rent reviews, curtail the length of leases and limit the landlord's right to prevent an assignment of the lease. The property industry's response has been to launch the code and to monitor its implementation for two years.

Nick Ellis of Brighton-based specialist property lawyers Nick Ellis & Co, said: "This is the last chance saloon for landlords. The Government thinks that upwards only rent reviews and onerous leases inhibit small and medium sized businesses. They think that landlords abuse their position by placing too many of the risks associated with property on the shoulders of the tenant.

"The Government has threatened to legislate and the property industry has treated this issue with the seriousness it deserves. Landlords and their advisors can show, by following the code, that they are more flexible and can offer a variety of different lease packages.

"The prime example would be a higher rent for a shorter lease term, or maybe a break clause allowing the tenant to end the lease early."

The problem Mr Ellis perceives is that not everybody knows about the code.

"The major financial institutions and property companies are implementing the code, the problem is that private landlords know very little about it, its implications or its implementation.

"By following the code, private landlords can influence the Government's thinking as the use of the code is monitored by the BPF and the Royal Institute of Chartered Surveyors, in turn this could influence Government legislation and may just prevent terms being imposed on the industry."

"The fact is that tenants will be better off. If the industry rises to the challenge of the code and really offers tenants more choice on length of term, break clauses and ability to sell on a leasehold interest, then tenants will gain.

"If the government perceives that the property industry has let tenants down, it will legislate."

Wednesday November 26, 2003