UK commercial property lease structures: Landlord and tenant mismatch

UK commercial property lease structures have come under considerable scrutiny during the past decade since the property crash of the early 1990s. In particular, tenants complained that the system was unfair and that it has blocked business change. Government is committed, through its 2001 election manifesto, to promote flexibility and choice in the commercial property lettings market and a new voluntary Commercial Leases Code of Practice was launched in April 2002. This paper investigates whether occupiers are being offered the leases they require or whether there is a mismatch between occupier requirements and actual leases in the market. It draws together the substantial data now available on the actual terms of leases in the UK and surveys of corporate occupiers' attitude to their occupation requirements. Although the data indicated that UK leases have become shorter and more diverse since 1990, this is still not sufficient to meet the current requirements of many corporate occupiers. It is clear that the inability to manage entry and exit strategies is a major concern to occupiers. Lease length is the primary concern of tenants and a number of respondents comment on the mismatch between lease length in the UK and business planning horizons. The right to break and other problems with alienation clauses also pose serious difficulties for occupiers, thus reinforcing the mismatch. Other issues include repairing and insuring clauses and the type of review clause. There are differences in opinion between types of occupier. In particular, international corporate occupiers are significantly more concerned about the length of lease and the incidence of break clauses than national occupiers and private-sector tenants are significantly more concerned about leasing in general than public-sector occupiers. Proposed solutions by tenants are predictable and include shorter leases, more frequent breaks and relaxation of restrictions concerning alienation and other clauses. A significant number specify that they would pay more for shorter leases and other improved terms. Short leases would make many of the other terms more acceptable and this is why they are the main concern of corporate occupiers. Overall, the evidence suggests that there continues to be a gap between occupiers' lease requirements and those currently offered by the market. There are underlying structural factors that act as an inertial force on landlords and inhibit the changes which occupiers appear to want. Nevertheless, the findings raise future research questions concerning whether UK lease structures are a constraining factor on UK competitiveness.

UK construction orders and output: A comparison of government and commercially available data 1995-2001

Because of the importance and potential usefulness of construction market statistics to firms and government, consistency between different sources of data is examined with a view to building a predictive model of construction output using construction data alone. However, a comparison of Department of Trade and Industry (DTI) and Office for National Statistics (ONS) series shows that the correlation coefcient (used as a measure of consistency) of the DTI output and DTI orders data and the correlation coefficient of the DTI output and ONS output data are low. It is not possible to derive a predictive model of DTI output based on DTI orders data alone. The question arises whether or not an alternative independent source of data may be used to predict DTI output data. Independent data produced by Emap Glenigan (EG), based on planning applications, potentially offers such a source of information. The EG data records the value of planning applications and their planned start and finish dates. However, as this data is ex ante and is not correlated with DTI output it is not possible to use this data to describe the volume of actual construction output. Nor is it possible to use the EG planning data to predict DTI construc-tion orders data. Further consideration of the issues raised reveal that it is not practically possible to develop a consistent predictive model of construction output using construction statistics gathered at different stages in the development process.

Information sources and advice used by small business tenants when leasing commercial property

Many small businesses lease commercial premises. The terms of a lease can affect the ability of the business to grow and adapt and have an impact on cashflow. Ensuring that they have the information with which to negotiate terms is part of the UK government policy focus on small businesses. Such information is most effectively disseminated through the sources of advice that small businesses use during the leasing process. Therefore these sources of advice need identifying. An interview survey of small business tenants who have recently taken leases provides initial results that suggest small businesses do not seek out advice during the leasing process or see the need to be better informed. The only formal professional input is from solicitors but this is not until after the main commercial terms have been agreed. The landlords’ letting agents play a key, but ambiguous, role in providing information as well as advice. These results suggest that the most effective way of disseminating information by government could be via the letting agents, the very people with whom the tenants are negotiating.

Lease maturity and initial rent: is there a term structure for UK commercial property leases?

This paper investigates the relationship between lease maturity and rent in commercial property. Over the last decade market-led changes to lease structures, the threat of government intervention and the associated emergence of the Codes of Practice for commercial leases have stimulated growing interest in pricing of commercial property leases. Seminal work by Grenadier (1995) derived a set of hypotheses about the pricing of different lease lengths in different market conditions. Whilst there is a compelling theoretical case for and a strong intuitive expectation of differential pricing of different lease maturities, to date the empirical evidence is inconclusive. Two Swedish studies have found mixed results (Gunnelin and Soderbergh 2003 and Englund et al 2003). In only half the cases is the null hypothesis that lease length has no effect rejected. In the UK, Crosby et al (2003) report counterintuitive results. In some markets, they find that short lease terms are associated with low rents, whilst in others they are associated with high rents. Drawing upon a substantial database of commercial lettings in central London (West End and City of London) over the last decade, we investigate the relationship between rent and lease maturity. In particular, we test whether a building quality variable omitted in previous studies provides empirical results that are more consistent with the theoretical and intuitive a priori expectations. It is found that initial leases rates are upward sloping with the lease term and that this relationship is constant over time.

Community based ecotourism as a panacea for protected areas: the use of common property theory in its analysis and development

Tourism is the worlds largest employer, accounting for 10% of jobs worldwide (WTO, 1999). There are over 30,000 protected areas around the world, covering about 10% of the land surface(IUCN, 2002). Protected area management is moving towards a more integrated form of management, which recognises the social and economic needs of the worlds finest areas and seeks to provide long term income streams and support social cohesion through active but sustainable use of resources. Ecotourism - 'responsible travel to natural areas that conserves the environment and improves the well- being of local people' (The Ecotourism Society, 1991) - is often cited as a panacea for incorporating the principles of sustainable development in protected area management. However, few examples exist worldwide to substantiate this claim. In reality, ecotourism struggles to provide social and economic empowerment locally and fails to secure proper protection of the local and global environment. Current analysis of ecotourism provides a useful checklist of interconnected principles for more successful initiatives, but no overall framework of analysis or theory. This paper argues that applying common property theory to the application of ecotourism can help to establish more rigorous, multi-layered analysis that identifies the institutional demands of community based ecotourism (CBE). The paper draws on existing literature on ecotourism and several new case studies from developed and developing countries around the world. It focuses on the governance of CBE initiatives, particularly the interaction between local stakeholders and government and the role that third party non-governmental organisations can play in brokering appropriate institutional arrangements. The paper concludes by offering future research directions."

Policy making without legislating: the self-regulation of commercial property leasing

The terms of a commercial property lease covers aspects such as rent, alterations to premises and the ability to leave; consequently they have a significant impact on cash flow and the ability of a business to develop. In contrast to the heavily-legislated residential sector, commercial landlords and tenants in the UK are largely free to negotiate the terms of their contract. Yet, since the property crash of 1989/90, successive governments have taken an interest in commercial leasing; in particular there is a desire to see landlords being more flexible. UK Government policy in this area has been pursued through industry self-regulation rather than legislation; since 1995 there have been three industry codes of practice on leasing. These codes are sanctioned by government and monitored by them. Yet, 15 years after the first code was launched, many in the industry see the whole code concept as ineffective and unlikely to ever achieve changes to certain aspects of landlord behaviour. This paper is the first step in considering the lease codes in the wider context of industry self-regulation. The aim of the paper is twofold: First a framework is created using the literature on industry self-regulation from various countries and industries which suggests key criteria to explain the effectiveness (or ineffectiveness) of self-regulation. This is then applied to the UK lease codes based on research carried out by the authors for the UK Government to monitor the success of all three codes. The outcome is a clearer understanding of the possibilities and limitations of using a voluntary solution to achieve policy aims within the property industry.

The challenge of self-regulation in commercial property leasing: a study of lease codes in the UK.

Purpose – UK Government policy to address perceived market failure in commercial property leasing has largely been pursued through industry self-regulation. Yet, it is proving difficult to assess whether self-regulation on leasing has been a “success”, or even to determine how to evaluate this. The purpose of this paper is to provide a framework for this and a clearer understanding of self-regulation in commercial leasing. Design/methodology/approach – A literature review suggests key criteria to explain the (in)effectiveness of self-regulation. UK lease codes are analysed in the light of this literature, drawing on previous research carried out by the authors on the operation of these codes. Findings – Lease codes appear to be failing as an effective system of self-regulation. While there are influential market actors championing them, the fragmentation of the leasing process lessens this influence. The structures are not there to ensure implementation, monitor compliance and record views of affected stakeholders. Research limitations/implications – This work adds to the literature on self-regulation in general, and provides an insight into its operation in a previously unexplored industry. Research is needed into the experience of other countries in regulating the property industry by voluntary means. Social implications – There are institutional limitations to self-regulation within the property industry. This has implications for policy makers in considering the advantages and limitation of using a voluntary solution to achieve policy aims within the commercial leasing market. Originality/value – This paper provides a first step in considering the lease codes in the wider context of industry self-regulation and is relevant to policy makers and industry bodies.

Housing or property? The dynamics of housing policy and property principles in the right to buy

This paper examines the interplay and tension between housing law and policy and property law, in the specific context of the right to buy (RTB). It focuses on funding arrangements between the RTB tenant and another party. It first examines how courts determine the parties' respective entitlements in the home, highlighting the difficulty of categorising, under traditional property law principles, a contribution in the form of the statutory discount conferred on the RTB tenant. Secondly, it considers possible exploitation of the RTB scheme, both at the macro level of exploitation of the policy underpinning the legislation and, at the micro level, of exploitation of the tenant. The measures contained in the Housing Act 2004 intended to curb exploitation of the RTB are analysed to determine what can be considered to be legitimate and illegitimate uses of the scheme. It is argued that, despite the government's implicit approval, certain funding arrangements by non-resident relatives fail to give effect to the spirit of the scheme.

The role of industry bodies in changing market practices through self-regulation: commercial property leasing in the UK

The UK government has sought to make changes to commercial property leasing practices. This has been the case since the recession of the 1990s. Industry self-regulation using an industry code of practice has been the vehicle for these changes. However, the code has had little direct success in changing practices. This is despite repeated threats of legislation as a constant backdrop to this initiative. The focus for this research is on the role of the industry bodies in the code initiative. They have been central to self-regulation in commercial leasing. Thus, the aim is to investigate the role of industry bodies in the process of institutional change. The context is industry self-regulation. The specific setting is commercial leasing. The main industry bodies in focus are the British Property Federation and Royal Institution of Chartered Surveyors. An existing model of institutional change forms the framework for the research. A chronological narrative is constructed from secondary data. This is analysed, identifying the actions of the industry bodies within the conceptual stages of the model. The analysis shows that the industry bodies had not acted as convincing agents of change for commercial leasing. In particular there was a lack of theorisation, a key stage in the process. The industry bodies did not develop a framework necessary to guide their members through the change process. These shortcomings of the industry bodies are likely to have contributed to the failure of the Code. However, the main conclusion is that, if industry self-regulation is led by government, then the state must work with industry bodies to harness their potential as champions and drivers of institutional change. This is particularly important in achieving change in institutionalised environments.

Property rights as a public policy tool: an empirical analysis of the social and economic effects

Secure property rights are considered a key determinant of economic development. However, the evaluation of the causal effects of land titling is a difficult task. The Brazilian government through a program called "Papel Passado" has issued titles, since 2004, to over 85,000 families and has the goal to reach 750,000. Furthermore, another topic in Public Policy that is crucial to developing economies is income generation and child labor force participation. Particularly, in Brazil, about 5.4 million children and teenagers between 5 and 17 years old are still working. This thesis examines the direct impact of securing a property title on income and child labor force participation. In order to isolate the causal role of ownership security, this study uses a comparison between two close and very similar communities in the City of Osasco case (a town with 650,000 people in the São Paulo metropolitan area). One of them, Jardim Canaã, was fortunated to receive the titles in 2007, the other, Jardim DR, given fiscal constraints, only will be part of the program schedule in 2012, and for that reason became the control group. Also, this thesis also aims to test if there is any relationship between land title and happiness. The estimates suggest that titling results in a substantial decrease of child labor force participation, increase of income and happiness for the families that received the title compared to the others.

Understanding e-government technology transfer: evidence from the transfer of a patent management system from EPO to INPI

Drawing upon Brazilian experience, this research explores some of the key issues to be addressed in using e-government technical cooperation designed to enhance service provision of Patent Offices in developing countries. While the development of software applications is often seen merely as a technical engineering exercise, localization and adaptation are context bounded matters that are characterized by many entanglements of human and non-humans. In this work, technical, legal and policy implications of technical cooperation are also discussed in a complex and dynamic implementation environment characterized by the influence of powerful hidden agendas associated with the arena of intellectual property (IP), which are shaped by recent technological, economic and social developments in our current knowledge-based economy. This research employs two different theoretical lenses to examine the same case, which consists of transfer of a Patent Management System (PMS) from the European Patent Office (EPO) to the Brazilian Patent Office that is locally named ‘Instituto Nacional da Propriedade Industrial’ (INPI). Fundamentally, we have opted for a multi-paper thesis comprising an introduction, three scientific articles and a concluding chapter that discusses and compares the insights obtained from each article. The first article is dedicated to present an extensive literature review on e-government and technology transfer. This review allowed the proposition on an integrative meta-model of e-government technology transfer, which is named E-government Transfer Model (ETM). Subsequently, in the second article, we present Actor-Network Theory (ANT) as a framework for understanding the processes of transferring e-government technologies from Patent Offices in developed countries to Patent Offices in developing countries. Overall, ANT is seen as having a potentially wide area of application and being a promising theoretical vehicle in IS research to carry out a social analysis of messy and heterogeneous processes that drive technical change. Drawing particularly on the works of Bruno Latour, Michel Callon and John Law, this work applies this theory to a longitudinal study of the management information systems supporting the Brazilian Patent Office restructuration plan that involved the implementation of a European Patent Management System in Brazil. Based upon the ANT elements, we follow the actors to identify and understand patterns of group formation associated with the technical cooperation between the Brazilian Patent Office (INPI) and the European Patent Office (EPO). Therefore, this research explores the intricate relationships and interactions between human and non-human actors in their attempts to construct various network alliances, thereby demonstrating that technologies embodies compromise. Finally, the third article applies ETM model as a heuristic frame to examine the same case previously studied from an ANT perspective. We have found evidence that ETM has strong heuristic qualities that can guide practitioners who are engaged in the transfer of e-government systems from developed to developing countries. The successful implementation of e-government projects in developing countries is important to stimulate economic growth and, as a result, we need to understand the processes through which such projects are being implemented and succeed. Here, we attempt to improve understanding on the development and stabilization of a complex social-technical system in the arena of intellectual property. Our preliminary findings suggest that e-government technology transfer is an inherently political process and that successful outcomes require continuous incremental actions and improvisations to address the ongoing issues as they emerge.

Macroeconomic volatility and social vulnerability in Brazil: the Cardoso government (1995-2002) and perspectives

Includes bibliography

What Business Reference Librarians Need to Know about Intellectual Property: Presentations sponsored by the Patent and Trademark Depository Library Association (PTDLA) at the American Library Association Annual Conference, New Orleans, June 25, 2006

Presentations sponsored by the Patent and Trademark Depository Library Association (PTDLA) at the American Library Association Annual Conference, New Orleans, June 25, 2006 Speaker #1: Nan Myers Associate Professor; Government Documents, Patents and Trademarks Librarian Wichita State University, Wichita, KS Title: Intellectual Property Roundup: Copyright, Trademarks, Trade Secrets, and Patents Abstract: This presentation provides a capsule overview of the distinctive coverage of the four types of intellectual property – What they are, why they are important, how to get them, what they cost, how long they last. Emphasis will be on what questions patrons ask most, along with the answers! Includes coverage of the mission of Patent & Trademark Depository Libraries (PTDLs) and other sources of business information outside of libraries, such as Small Business Development Centers. Speaker #2: Jan Comfort Government Information Reference Librarian Clemson University, Clemson, SC Title: Patents as a Source of Competitive Intelligence Information Abstract: Large corporations often have R&D departments, or large numbers of staff whose jobs are to monitor the activities of their competitors. This presentation will review strategies that small business owners can employ to do their own competitive intelligence analysis. The focus will be on features of the patent database that is available free of charge on the USPTO website, as well as commercial databases available at many public and academic libraries across the country. Speaker #3: Virginia Baldwin Professor; Engineering Librarian University of Nebraska-Lincoln, Lincoln, NE Title: Mining Online Patent Data for Business Information Abstract: The United States Patent and Trademark Office (USPTO) website and websites of international databases contains information about granted patents and patent applications and the technologies they represent. Statistical information about patents, their technologies, geographical information, and patenting entities are compiled and available as reports on the USPTO website. Other valuable information from these websites can be obtained using data mining techniques. This presentation will provide the keys to opening these resources and obtaining valuable data. Speaker #4: Donna Hopkins Engineering Librarian Renssalaer Polytechnic Institute, Troy, NY Title: Searching the USPTO Trademark Database for Wordmarks and Logos Abstract: This presentation provides an overview of wordmark searching in www.uspto.gov, followed by a review of the techniques of searching for non-word US trademarks using codes from the Design Search Code Manual. These codes are used in an electronic search, either on the uspto website or on CASSIS DVDs. The search is sometimes supplemented by consulting the Official Gazette. A specific example of using a section of the codes for searching is included. Similar searches on the Madrid Express database of WIPO, using the Vienna Classification, will also be briefly described.

The abuse of intellectual property rights and regulations in China: a law and economic analysis

From the institutional point of view, the legal system of IPR (intellectual property right, hereafter, IPR) is one of incentive institutions of innovation and it plays very important role in the development of economy. According to the law, the owner of the IPR enjoy a kind of exclusive right to use his IP(intellectual property, hereafter, IP), in other words, he enjoys a kind of legal monopoly position in the market. How to well protect the IPR and at the same time to regulate the abuse of IPR is very interested topic in this knowledge-orientated market and it is the basic research question in this dissertation. In this paper, by way of comparing study and by way of law and economic analyses, and based on the Austrian Economics School’s theories, the writer claims that there is no any contradiction between the IPR and competition law. However, in this new economy (high-technology industries), there is really probability of the owner of IPR to abuse his dominant position. And with the characteristics of the new economy, such as, the high rates of innovation, “instant scalability”, network externality and lock-in effects, the IPR “will vest the dominant undertakings with the power not just to monopolize the market but to shift such power from one market to another, to create strong barriers to enter and, in so doing, granting the perpetuation of such dominance for quite a long time.”1 Therefore, in order to keep the order of market, to vitalize the competition and innovation, and to benefit the customer, in EU and US, it is common ways to apply the competition law to regulate the IPR abuse. In Austrian Economic School perspective, especially the Schumpeterian theories, the innovation/competition/monopoly and entrepreneurship are inter-correlated, therefore, we should apply the dynamic antitrust model based on the AES theories to analysis the relationship between the IPR and competition law. China is still a developing country with relative not so high ability of innovation. Therefore, at present, to protect the IPR and to make good use of the incentive mechanism of IPR legal system is the first important task for Chinese government to do. However, according to the investigation reports,2 based on their IPR advantage and capital advantage, some multinational companies really obtained the dominant or monopoly market position in some aspects of some industries, and there are some IPR abuses conducted by such multinational companies. And then, the Chinese government should be paying close attention to regulate any IPR abuse. However, how to effectively regulate the IPR abuse by way of competition law in Chinese situation, from the law and economic theories’ perspective, from the legislation perspective, and from the judicial practice perspective, there is a long way for China to go!