Legal BlogsChanges to EPC Requirements – what needs to be done?

14/04/2023

(Infographic Credit: Tom Walker)

NEW 2023 EPC RULES:
The new rules will apply to both existing leases and new leases and it seeks to prohibit commercial tenancies where the buildings have an EPC rating of F and below. There are fines for breaking these rules.

 

What is an EPC?

An Energy Performance Certificate (EPC) is a document that shows the current and potential energy efficiency of a property through ratings. The ratings can range from A (being the most efficient) to G (being the least efficient).

 

What are the current MEES requirements and how are they changing from 1 April 2023?

Until the 1st of April 2023, the Minimum Energy Efficiency Standards (MEES) requirements do not allow landlords to grant new leases on commercial properties with EPC ratings of F or lower (subject to certain exemptions). The current rules do not at the moment affect existing leases.

From 1 April 2023, the MEES requirements will apply to existing leases as well as on the grant of a new lease.  So, all let properties will need an EPC rating of E or above, again subject to certain exemptions.

 

 

 

 

Q: Is there a penalty for non-compliance?
A: Yes. The penalty for non-compliance is a financial one. It would be based on 10-20% of the rateable value of the property up to a maximum of £150,000, whichever is greater. As a landlord in breach of the regulations, you could also be included in a public register, which gives details of the breach.

Q: What are the exemptions?
A: Some examples include: the improvements required to raise the rating would devalue the property by 5% or more or that the works would damage the property, or if the consent of a third party is needed for the works but this has been applied for and refused.

 

The exemptions are not applied automatically. They have to be registered in advance on the exemptions register. An exemption also has to be renewed at least every five years.

 

 

 

 

“Tenants cannot sub-let the property if the EPC rating is F or lower”

 

What the new changes to the rules mean for the landlord and the tenant:

FOR THE LANDLORD – An Energy Performance Certificate (EPC) is a document that shows the current and potential energy efficiency of a property through ratings. The ratings can range from A (being the most efficient) to G (being the least efficient).

FOR THE TENANT – Tenants need to check current leases to establish if the cost of works to increase an EPC rating are the landlord’s responsibility or theirs. When considering fit out works, or any alterations, a tenant needs to consider the energy efficiency of the proposed work. Landlords are going to consider the energy efficiency of works when consent to the works is sort by the tenant. Tenants cannot sub-let the property if it is non-compliant with the MEES requirements.

 

If you are unsure about your lease or you may have questions regarding your responsibilities within the lease in view of compliance with MEES requirements, please feel free to contact us at info@bertramfairbanks.co.uk or 01392 770380.

 

Written by Julia Knight
PARTNER

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This article is provided by Bertram Fairbanks for general information only. It is not intended to be and cannot be relied upon as legal advice or otherwise. Professional legal advice should always be obtained before taking any action relating to this article. If you would like to discuss any of the matters covered in this article, please contact us.

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