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

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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Law in the Built Environment Emerald Publishing

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

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Publisher
Emerald Publishing
Copyright
Copyright © 2012 Emerald Group Publishing Limited. All rights reserved.
ISSN
1756-1450
DOI
10.1108/17561451211211723
Publisher site
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Abstract

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.

Journal

International Journal of Law in the Built Environment – Emerald Publishing

Published: Apr 13, 2012

Keywords: United Kingdom; Commercial property; Leasing; Government policy; Commercial property lease; Industry self‐regulation; Market failure; Code of practice

References

  • Are market failures and IA useful?
    Andrews, P.