A new deadline is looming large for commercial landlords. If it isn’t one you’re aware of yet, then it’s time to get up to speed and it’s certainly not one to ignore.
From the start of next month, the Minimum Energy Efficiency Regulations (MEES) for leases will be changed. All commercial properties will have to have a minimum Energy Performance Certificate (EPC) rating of E before leases can be agreed with new or existing tenants.
Therefore, if your property has an EPC rating of F or G, it will be deemed to be sub-standard for MEES purposes and, therefore, cannot continue to be let .
A potentially costly omission
From April 1, if landlords let a property or continue an existing letting without improving it to ensure it’s no longer sub-standard, they will be in breach of the MEES regulations and liable for a fine of up to £150,000 for each property. The level of the fine will depend on the size and nature of the property and how long it has been in breach but it’s a risk of which landlords must be aware.
Unless you have a legitimate reason, continuing to let a property after April 1 will be a breach of Part 3. Legitimate reasons are defined as being that all relevant energy efficient improvements have been made of none can be made. Exemptions must also be entered on the Private Rented Sector Exemptions Register.
What do landlord need to do?
The most important thing to do is to know the EPC rating of each property you have. Do the changes apply to your property or properties and if so, what measures do you need to take?
Landlords must also check their leases to establish whether there are any clauses relating to energy efficiency and/or compliance with EPC regulations. Further, they must also establish whether third party consent would be required for any improvements or necessary modifications.
As with most legislation changes, it’s a potential headache that landlords could undoubtedly do without. However, it is not one that should be ignored.
The reality is that, as we continue to work towards a net zero future, MEES regulations will change again and the new rating on April 1 will undoubtedly be strengthened further. Acting now, and seeking advice where needed, is a sensible move to prevent future issues.
Duncan Carter is a Director of Bell Park Kerridge and an expert in commercial property matters. Contact him for advice on dcarter@bpkcumbria.co.uk.
