Date published: 14th April 2023

All Landlords should know the importance of EPC requirements for their commercial premises. The implementation of the Minimum Energy Efficiency Standards (MEES) in 2018 made it unlawful for Landlords to grant new commercial leases if the EPC rating for the building was less than an ‘E’.

What changes are coming?

Changes are being made to the MEES and EPC requirements. The latest set of EPC regulations came into force on 1st April 2023, and it is vital that you, a Landlord, have an understanding of what these changes mean and the impact they will have.

As of the 1st of April 2023, it is now a requirement of ALL tenanted commercial properties to have an EPC rating of at least E. This will not only apply to any new tenancies granted but also to any existing tenancies.

Call today and speak to a commercial property legal expert.

Are you exempt?

Landlords will be exempt from the new EPC regulations if they can show evidence of one of the following:

  • All cost-effective energy efficiency improvements under the Green Deal’s “Golden Rule” have been carried out, and the EPC rating remains below E;
  • Consent to carry out the works is refused by a third party, such as a Local Authority, tenant, lender or superior landlord; or
  • An independent surveyor provides written advice that the improvements would result in a devaluation of the property by 5% or more, or that the works would damage the property.;

The above exemptions are not automatic and if you intend to rely on any exemption, you must register the exemption on the PRS Exemptions Register before the lease is entered. It is important to note that the exemptions are only valid for 5 years.

Unsure if you are exempt? Make an enquiry.

What happens if you are in breach?

It is important that you, as the Landlord, comply with the regulations.

  • If you are in breach of the regulations, you will receive a financial penalty.
  • If you lease a non-compliant property for a period of fewer than 3 months, you can receive a fine of 10% of the rateable value with a minimum fine of £5,000.00 and a maximum fine of £50,000.00.
  • If you lease the property for more than 3 months, then a fine can be imposed of 20% of the rateable value with a minimum fine of £10,000.00 and a maximum fine of £150,000.00.

Are you in breach? Call today for legal advice.

What can you do now?

You need to be proactive and act now to try and make your property compliant with the updated regulations.

You should only be considering purchasing properties that have a minimum EPC rating of at least E or above. If you decide to purchase a property with an EPC rating lower than E, then you may find that you experience difficulties when you come to lease the property.

If you already have an existing portfolio and several commercial leases with EPC ratings lower than E, then you must review each lease and check if any work can be undertaken to improve the EPC rating. If you find that work is required then you will need to see whether you can recoup any cost for the improvement works from the Tenant. 

Whether you are a Landlord or Tenant, we are on hand to advise you about any lease renewals or new leases, to help you ensure MEES and EPC regulation requirements are met.

Make an enquiry with a legal expert.

Contact our experts

If you are finding yourself in a commercial property dispute, acting quickly gives you the best chance of success. Our commercial property solicitors can help advise on the best course of action to take while protecting your legal position every step of the way. Get in touch with our experts at our Liverpool and Wirral offices and they’ll be on hand to guide you through this process.

Call us today on 0151 282 1700, request a callback at a time that is convenient for you, or make an enquiry today.