Next, he asks: What if the Landlord spends substantially more on clean energy for the building and the tenant complains? This, he says, can result in arguments over whether and to what extent the clean energy or clean energy renovations are capital expenses that should be paid for by the landlord or are operating expenses that should be paid for by the tenant.

"In a typical net lease, the operating expenses are paid by the tenant and capital expenses are paid by the landlord," Robinson says. "Some lease provisions cap or limit the amount that can be passed through by some amount, either tied to a specific number, to a 'reasonableness' standard, or to payments by comparable buildings in the local market."

When drafting new leases, Robinson says, the landlord should specifically insert language entitling him to select the source, type, and provider of electrical services and the types of source provided, including wind, solar, energy efficiency, and so on. Also, the languages should be clear that all charges and expenses shall be included in “operating expenses.” The landlord should reserve the right to change providers and the types and sources of electricity at any time.

"In contrast, the tenant may wish to limit this right," Robinson says. "For example, by capping such operating expenses by a maximum monthly number, by a percentage (such as 120% of the 'standard' kilowatt per hour charge) or by 'commercially reasonable' or 'comparable building' standards. It could ask for notice or even a veto right before certain investments are incurred, such as written consent, or 'no wind turbines.'"

Next question: What if the landlord does not pursue green certification in the most cost-effective way, or in ways that shift costs to the tenant? Robinson says even in in the most cooperative of green leasing activities, if the tenant and landlord do not sufficiently work things out ahead of time, there could be changes that are not practically available or that could substantially impact the tenant's business.

"The landlord may also find that she is able to achieve certification in more than one way, but may choose certification in a manner that passes the greatest amount of costs to the tenant, as opposed to cheapest way of achieving certification," Robinson says. "This can be aggravated if the lease lacks sufficient disclosure requirements, or if there is a lag in communication between landlord and tenant. Once money has been spent, what could have been avoided with a conversation on the front end may now require more negotiation, coordination, and potentially litigation."

At its core, Robinson reminds, a “green lease” represents a way for a landlord and tenant to negotiate changes in design and behavior related to the energy performance of the building and its tenants. There are several reasons for this.

Robison says, for example, that it may be because the landlord wishes to save money and can pass some of those savings on to tenant. It may be because a corporate tenant has an overall sustainability plan, and entering into a green lease allows the landlord to afford the necessary investments to initially attract the tenant.

"Whatever the case may be, any negotiation of a green lease should begin with a comprehensive discussion among all of the stakeholders about what the expectations should be regarding the ultimate result and each stakeholder's role in pursuing that result," Robinson says. "This will allow the provisions of the lease agreement to clearly set expectations and to create certainty among the landlord, tenant, and other service providers involved."

In contrast, the tenant may wish to limit this right," Robinson says. "For example, by capping such operating expenses by a maximum monthly number, by a percentage (such as 120% of the 'standard' kilowatt per hour charge) or by 'commercially reasonable' or 'comparable building' standards. It could ask for notice or even a veto right before certain investments are incurred, such as written consent, or 'no wind turbines.'"

Next question: What if the landlord does not pursue green certification in the most cost-effective way, or in ways that shift costs to the tenant? Robinson says even in in the most cooperative of green leasing activities, if the tenant and landlord do not sufficiently work things out ahead of time, there could be changes that are not practically available or that could substantially impact the tenant's business.

"The landlord may also find that she is able to achieve certification in more than one way, but may choose certification in a manner that passes the greatest amount of costs to the tenant, as opposed to cheapest way of achieving certification," Robinson says. "This can be aggravated if the lease lacks sufficient disclosure requirements, or if there is a lag in communication between landlord and tenant. Once money has been spent, what could have been avoided with a conversation on the front end may now require more negotiation, coordination, and potentially litigation."

At its core, Robinson reminds, a “green lease” represents a way for a landlord and tenant to negotiate changes in design and behavior related to the energy performance of the building and its tenants. There are several reasons for this.

Robison says, for example, that it may be because the landlord wishes to save money and can pass some of those savings on to tenant. It may be because a corporate tenant has an overall sustainability plan, and entering into a green lease allows the landlord to afford the necessary investments to initially attract the tenant.

"Whatever the case may be, any negotiation of a green lease should begin with a comprehensive discussion among all of the stakeholders about what the expectations should be regarding the ultimate result and each stakeholder's role in pursuing that result," Robinson says. "This will allow the provisions of the lease agreement to clearly set expectations and to create certainty among the landlord, tenant, and other service providers involved."