The new code is yet another attempt to inject flexibility into landlord/tenant relationships. With industry-wide support from bodies as diverse as the British Property Federation, the RICS, the British Retail Consortium and the Forum for Private Business, the new code is clearer and more concise than its predecessors. And that means it should be easier to monitor compliance that was the case with its predecessor.

Mishcon de Reya partner Philip Freedman, chair of the industry-wide panel that drew up the code, said: "The code promotes alternatives to the traditional upwards-only rent reviews and suggests up/down reviews to market rent, perhaps with a minimum of the initial rent, or totally different rent review arrangements such as indexation."

However, the onus will remain on tenants to ask for alternatives to traditional lease terms, but Freedman said: "If asked landlords should either quote alternative terms or give a reason why they couldn't do so."

The code covers a range of other bones of contention. For instance, on break clauses, Freedman said: "If the tenant is being given the right to break the term the code says that this right should not be so hedged with preconditions that it will be difficult for the tenant to exercise the break."

And on subletting rights the code has adopted the standard set by the British Property Federation: that the rent in the underlease may be less than the passing rent provided that it is not lower than open market rental value. There is also an important clarification of the widely-used FRI lease. This has proved to be a trap for many tenants that find themselves required to put a property into good repair before they can vacate, when they actually took it over in a state of some disrepair. The code says that unless the lease states to the contrary tenants should only be required to reinstate properties to the condition they were in when they took possession.

On assignment the code strengthens the existing convention that landlords' consent should not be unreasonably withheld by asserting that guarantees should only be required where the financial standing of the assignee is less than that of the assignor.

The new code comes in three sections: a guide for landlords; a guide for tenants setting out the sort of questions they should be asking when negotiating a lease; and a model set of heads of terms that lawyers should use when drawing up commercial leases. And significantly the Law Society has agreed to incorporate this into its standard form of lease.

Responding, Cooper said: "It is welcome that the code has received wide endorsement. Businesses need a flexible, affordable and efficient leasing environment." But she warned: "The commercial property market must work for both owners and occupiers alike. The move to shorter leases is welcome, but the upwards-only rent review is still the norm and we do have concerns about that."

And she concluded: "This is as an important step forward by the industry that sets out clearly and simply best practice and advice for lease negotiations. My challenge to the industry is to make sure that it is used in all lease negotiations. We shall be keeping a close watch on the market to see that it makes a real difference. We want to make self-regulation work so legislation isn't necessary."

British Retail Consortium director general Kevin Hawkins, a long-standing advocate of legislation, welcomed the code. "This is the third attempt to get more flexibility in the commercial property market and I believe it will be the final attempt. My members remain sceptical but I'm optimistic." The reason, he said, was that market forces were moving in favour of change. "The supply of retail space is increasing faster than the demand for it, and that in turn will increase the competitive pressure on secondary and tertiary space. The likely outcome is a set of lease terms more in the tenants' favour."

British Property Federation chief executive Liz Peace said the new code was an improvement on its 2002 predecessor.

"The 2002 code didn't have quite enough of a consensual approach," she said. "But this has much more support from the occupiers. The 2002 code went a long way but this goes a whole lot further."

And she pointed out that landlords controlling over £100bn of property had already pledged to support the code, and her organisation would now be actively promoting the code to smaller landlords.

Peace said the next step would be the introduction of a Commercial Landlords Accreditation Scheme which would only be open to those who abided by the code of practice. The scheme would be independently audited so that accreditation could be withdrawn from landlords who were found to be acting in breach of the code. She said the scheme would be introduced as soon as the standards board could be set up.

Significantly, though, the RICS has stopped short of making compliance with the code mandatory for its members, something it has done with the code of practice on service charges. Chief executive Louis Armstrong explained that such a move would limit members' ability to negotiate in their members' best interests.

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