Commercial landlords still have time to act on new energy efficiency rules that could see them fined up to £150,000 if their properties are not upgraded.
They should also be mindful that although their buildings may currently meet the new Minimum Energy Efficiency Standards (MEES), their rating could soon be downgraded because of changes to the way environmental credentials are assessed.
From 1 April 2018 it became illegal for landlords to grant a new lease, a renewal lease or a lease extension to an existing or new tenant of a property with an Energy Performance Certificate (EPC) of F or G.
However, buildings with an EPC rating of D and E could also be at risk.
Ben Strange, Director at our London office, said: “Significant changes to EPC assessment and several revisions to Part L of the Building Regulations mean that many EPCs could be downgraded. As a result, properties which currently comply with MEES may not always do so in the future.
“Whilst Government statistics state that just 18% of commercial properties have EPCs of F or G, of increasing concern is the 47% of properties that are currently within the D and E bracket and could fall below the new standard upon reassessment.
“It’s therefore important for landlords to consider both the short and long-term impact of MEES and to ensure they have taken the appropriate action to protect their portfolio.
“Where tenants can prove a property fails to meet the regulations they may look to take advantage – asking for a reduction in rent, a rent holiday or compensation because improvement works have caused disruption to their business.”
All commercial properties will be subject to MEES if they currently have an EPC or will require one in the future. However, there are some exceptions, with the legislation not applying to lettings of less than six months or to tenancies over 99 years.
Properties thought to be most at risk are those that have had no improvements in the past 15 years or more, with outdated heating systems, inefficient lighting and poor insulation.
To find out more about how MEES could affect your property or for advice on how to meet the new standards, contact: