Landlords of commercial premises beware; minimum energy performance standards are now in place which could lead to hefty fines for those in breach.
From April 2023 there is a requirement that commercial premises meet 'C' rating as a minimum energy performance. Where the premises don't meet this threshold, and do not otherwise fall within a limited exemption, landlords will be fined potentially significant sums.
These new Regulations intend to assist the direction of travel to 'net zero'.
More alarmingly for many landlords will be the minimum requirement increasing to 'B' energy performance from April 2030.
Although commendable, the EPC Regulations will give rise to headaches to landlords of commercial properties:
- What works / improvements will they need to carry out to meet the minimum renting criteria of C / B Rating from April 2030?
- How much will it cost to implement the improvements?
- When is the current EPC assessment due for renewal? Might the new EPC on publication put the landlord in immediate breach?
- Is it possible in practice to make the changes advised e.g. the property is listed / solar panels, an impossible change?
- Overcoming the cost, is the tenant obliged to allow access for the works?
- What if access is refused?
Further considerations include:
How might the landlord try to protect itself from the anticipated B Rating requirements on the horizon?
What changes on renewal might a landlord be advised to try to negotiate, conscious of the EPC changes?
As specialist landlord and tenant solicitors, we can advise clients of the options available, the pitfalls, and strategic ways of how and when to address access and the EPC changes. Groundwork by commercial landlords now could avoid hefty fines in the future.
