There is not much time left until the Minimum Energy Efficiency Standards (MEES) rules come into force in April 2018, making it unlawful for landlords to let out or renew leases of buildings with an EPC rating below E. See our recent Tip of the Week.
However, there is another challenge for landlords of commercial buildings coming up in April 2023, when it will become unlawful to continue to let buildings with an EPC rating below E. Business Green's article highlights how since the introduction of EPCs, it has become harder to achieve the better ratings, so a significant number of properties now rated E, could be downgraded when the next EPC is prepared, leaving the landlord with a compliance problem.
A new EPC might be required because an existing one has expired (they have a lifespan of 10 years) or because a significant refurbishment of the building is carried out. Landlords increasingly insist on tenant covenants in leases requiring landlord's consent for works which might trigger the requirement for a new EPC and for any new EPC to be obtained by an assessor of the landlord's choice. Both measures aim to increase the landlord's control over when and how a new EPC is prepared.
Well informed buyers are running simulations of EPCs before purchase, even where the EPC provided by the seller is E or above and has some years to run. If the simulation spits out a rating of below E, buyers are using this to argue for a price chip.
So, whether a landlord plans to continue to hold its building or to sell, there is nowhere to hide from the MEES regulations.
Thousands of UK commercial landlords could be at risk from MEES energy efficiency rules - and they don't even know it