No, there was not anything specific, but it is clear enough. If the insurance is vitiated by an act or default of the tenant or their own contractors or servants for whom they have vicarious liability, it is fair enough, and the tenant should not benefit from that.

There is room for some discussion of the suggestion that somehow the tenant is liable for the acts of its customers in a retail shop. I find it difficult to see how a reasonable insurer or reasonable insurance policy could be written in such a way as to allow the insurer to vitiate because of the actual default of the customer, who in effect, neither landlord nor tenant control. It is a point for discussion that comes up quite frequently, particularly where the drafting says "invitees".

It is a point that is worth looking at, but in practical terms, a sensible insurer and a decent policy representing good value should not catch out the tenant. It is not so much the policy that would allow vitiation by a customer, but more the wording of the lease, and that could cause problems because the insurer would be allowed to look at the lease and possibly step into the shoes of the landlord.

The purpose of the drafting of the Lease Code was to draw a line as to what was a landlord risk and what was a tenant risk. In practice, the view was that the landlord is a property investor, and that damage to property is one of the risks of property investment. The tenant is a trader, and should not be expected to bear the risk of unusable property because although there is a rent suspension, it is not much fun if the place is actually a pile of ash and is unusable.

It is obviously not 100% clear-cut and there is something for negotiation, in particular the points on terrorism. Since the ABI made its decision in November 1992, it has been a point for discussion ever since.

My understanding is that, in valuation terms, it is now becoming accepted that there is not a nasty valuation yield point if the lease is Lease Code compliant. My personal experience is that the insurance provisions are becoming a less controversial issue than some of the others.

Not so far as stamp duty land tax obligations were concerned, but there was a huge amount of discussion amongst the small business representatives, in particular, as to upwards only rent reviews.

The reality is that upwards only rent review has become so much market practice, that the working group did not feel that they could suggest something that was completely contrary to that market practice.

There are some of the big retailers, B&Q amongst others, that are beginning to negotiate an annual or a five yearly uplift on an inflation basis, or even on a fixed percentage basis. There are advantages to this in that they know exactly what the rent is going to be from one year to another, the landlord again has that certainty, you get rid of the inevitable fees and arguments on both sides and late review and interest.

It was a point that was considered but we really did not feel we could go any further.

That is a difficult one, because O'May is the case and you basically have to start with what you have got.

You may have a case. It is interesting, but if lawyers say it is interesting, clients see pound signs coming up. It may be good for us as lawyers but not anyone else.

The way I have argued it, and have suggested to the client, if you can get hold of the client quickly enough, is that you tell the client that they are renewing the lease and they should not agree the rent immediately. This will give you the ability to negotiate something different. If the client has an old style lease that is particularly "landlord friendly" and draconian, and the landlord is insisting that the renewal lease is in the same form, you should then argue that the rent should be x% less because of the restrictive old style form of the lease.

My suspicion is (but you can't always tell with landlords) that what will then happen is that the landlord will look at the most important points: the length of the term, the rent and the identity and covenant strength of the tenant. After that, most of the rest of the points can be dealt with between the lawyers.

I can't say to you that if you take this approach to the county court, the judge will take it one way or another, but the whole thrust of the industry and the various codes to date and research undertaken, has been towards a more flexible and sensible basis. If the modern lease is going to be on that basis, and then something is negotiated that is not on that basis, this should be reflected in the rent. This does not quite answer your question, but it does give you an argument.

Can I add to that and say that in practice, I have found institutional landlords to be much more favourable towards an argument to include such things and towards updating. You might want to mention that your landlords are not following standard practice.

I think it depends. If you have a very tight user clause, that would make a difference to the valuation. If you have lease A, which has a flexible user clause and lease B, which says that property can only be used for a butchers, then I have difficulty in saying that there is not a valuation point. We do not have valuers here, only lawyers, but as an intellectual exercise, I think it ought to make a difference.

Having been a BRC representative, I have done a very large amount of my work through my career for occupiers and tenants. I would say that the standard level playing field lease should now be the Lease Code-compliant one. I would not expect a landlord to get a higher than market rent whatever that is, but I would expect the tenant to argue for a lower than market rent if the lease is not Lease Code-compliant. Yes, a very flexible lease is obviously a benefit to the tenant, but it is equally a benefit to the landlord.

I would think yes.

It would seem the landlord is entitled to protect its investment and to reasonably refuse consent where that has an adverse effect on rental levels.

Equally, there is the whole thing about compliance with statute, like the discrimination legislation. The tenant may be able to argue that compliance will constitute an improvement, and that different criteria should apply.

Maybe. I would say if a tenant messes up the air conditioning of a building by altering what has been designed for open plan air conditioning, then the tenant suffers. There will be a costs impact.

I did the lecture on the model heads of terms, back in the summer and it was interesting on the feedback forms that we had. The audience was predominantly surveyors, and the feedback was that we may as well write the leases, because we are pretty much negotiating everything that was going in them. It is about striking a balance. The number of times I go back to the heads of terms, and you have an alienation provision in there and it just says assignment, underletting permitted, but it does not say of what - part or whole, if there is a limited number of sublets - that sort of thing.

I have tried to use the Model Heads of Terms as a basis for discussion with clients, so the terms are at least addressed. Whether the terms agreed are Lease Code-compliant or not is moving onto the next stage. I don't think we are going to get leases that are Lease Code-compliant over night, but we can start by getting clients to discuss the issues at the heads of terms stage.

A bit of feedback from my commercial committee, which involves about 15 of the biggest landlords who were very keen to see the Model Heads of Terms taking on almost the same status as the Commercial Property Standard Enquiries in terms of being universally used. You can still come back and say "please refer" but at least have the Model Heads of Terms as the basis of discussions.

Answering your question on the point of the monitoring of the code, the Government has not officially said over what period it will monitor the Lease Code. The last we heard was two years for an interim review, and four for a final review, but if you look back to the Minister's statement in 2005, she said a three year review. Until we get an official statement, we are never sure.