"Be Prepared"

For commercial landlords it is often the case that apparently innocuous changes in legislation can have the most severe financial implications and consequences.

So it is the case with the changes that came into effect on the 1st April 2023 on energy efficiency and EPC (Energy Performance Certificates) ratings for rented commercial property. From this date any commercial property subject to a new or renewal lease must have a rating of not less than E. However, next year this requirement will be extended to include both new and all existing commercial leases.

To comply with the EPC legislation, it is estimated that 95% of all commercial landlords will have to make significant improvements to their properties but more worryingly, nearly 25% are blissfully unaware of the changes and the financial penalties of up to £5,000.00 for non-compliance.

Minimum Energy Efficiency Standards (MEES) form part of the government’s strategy to reach net zero emissions by 2050 and will result in the minimum rating increasing from F to C by the end of the decade. The stark choice many landlords will have to make, is either to spend significant sums improving their properties or sell them.

Whilst there are a few limited exemptions to the MEES regulations, it is self-evident that energy efficiency is going to significantly impact on the financial viability of certain commercial buildings and landlords should be planning ahead accordingly.