The EPC changes for commercial properties and what landlords need to know

The EPC changes for commercial properties and what landlords need to know

From 1 April 2018 the regulations regarding Energy Performance Certificates (EPC) for commercial property are changing. We take a look at what those changes involve and what implications they have for commercial landlords.

Proposed changes by the government’s Department of Energy and Climate Change, mean that up to one-third of commercial properties may not be able to be rented out after April 2018, if they do not make changes to reach minimum energy efficiency standards.

What do the EPC changes mean?

Currently, EPCs rate how energy-efficient a building is, from A (the most efficient) to G (the least efficient). However, from April 2018, it will be unlawful for a landlord to let a commercial property with an F or G EPC rating, unless there is a valid exemption.

These proposals are in response to government efforts to meet its carbon reduction targets – the built environment being one of the major contributors to greenhouse gases and thus to global climate change. In 2015 Minimum Energy Efficiency Standards (MEES) were introduced by the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 and were designed to tackle energy efficiency within older buildings. Building regulations now ensure developers and builders construct both domestic and commercial properties which meet stringent energy efficiency requirements.

From April 2018

From this date, landlords wishing to rent out a commercial property or renew a lease must ensure that the building has an EPC rating higher than ‘E’. This has the potential to severely impact landlords whose property is not newly built and does not meet current building requirements. For example, the government’s own data suggests that 35% of non-residential properties which were EPC surveyed in 2015 achieved only an E, F or G rating indicating that many landlords could be affected by these new regulations.

Exemptions

There are, of course, exemptions to the new rules. These include listed buildings, temporary structures, industrial sites or workshops, and detached buildings with a floor space of less than 50m sq. Some vacant properties and buildings which are due for demolition are also exempt.

Penalties

If you fail to bring your property in line with the new EPC regulations, your local authority can serve a compliance notice on you requesting that you inform them of the steps you are taking to remedy the situation. If the information is not forthcoming, the Local Authority may serve a penalty notice of up to £5,000.

What steps you need to take

If you think your commercial property may contravene these new guidelines you should obtain an accurate EPC rating from a qualified and accredited energy assessor. If the results show that your commercial property has a rating of F or G, you should take steps to make it more energy efficient (simple changes like energy efficient light bulbs can make a real difference) before April 2018. Not only will this help with future EPC ratings, but the changes will have a positive incentive for new tenants to occupy the property, as well as saving money, and ultimately the planet.

For more information about the proposed changes, how they will affect your commercial property and how to obtain an EPC rating, talk to a member of our team. Our experts can offer you advice on the best course of action to take in your specific circumstances.