Dependants who have not been adequately provided for in a deceased person's will may be able to...
Upcoming changes to commercial EPC requirements mean landlords face tightening rules on energy efficiency.
The Minimum Energy Efficiency Standards (MEES) set performance requirements for properties to be legally let in England and Wales. Since April 2023, landlords of non-domestic let property must ensure their building has at least an EPC rating of E, even when there has been no renewal or assignment of the lease. Without an exemption, buildings rated F or G may already be categorised as substandard.
With the UK government committed to achieving and working towards net zero greenhouse gas emissions by 2050 and in order to improve the energy efficiency of the nation’s building stock, the Government is expected to confirm new deadlines for the next phase of MEES by the end of 2025. Although earlier proposals to target an EPC rating of C by 2027 and an EPC rating of B by 2030 were pushed back, industry experts now anticipate all leased commercial properties will need to attain a minimum EPC rating of B sometime between 2030and 2035.
While clarity is still awaited from the Department for Energy Security and Net Zero (DESNZ) on whether the interim milestone of EPC C will remain part of the framework, EPC B is still projected to become the benchmark. These changes carry financial and operational implications, as a substantial proportion of the commercial property market is expected to fall short without urgent upgrades.
Reports suggest that up to 70% of commercial floor space in England and Wales is currently rated C or below, putting an estimated £700 billion of assets at risk of becoming unlettable. Commercial property owners are urged to plan ahead, review portfolios, and budget for upgrades as regulatory pressure increases. For many landlords, this will demand significant investment and forward planning to avoid regulatory penalties or unlettable assets.
A range of MEES exemptions may be available, but each has tight conditions. These include situations where upgrades are not economically viable within a seven-year “payback” period; where all reasonable improvements have already been carried out; where required works would damage the building; or where third-party consent, such as from a tenant or lender, is refused.
Landlords should also be aware that exemptions are temporary and non-transferable. Any exemption registered on the PRS Exemptions Register automatically lapses on a charge of ownership. A buyer cannot rely on a previous owner’s exemption, although new landlords can apply for a six-month temporary exemption while improvements are completed or a further exemption is registered. The message for landlords is that delay increases cost and risk; the time to act is now.
What actions landlords should take now
Audit your property portfolio: Identify which assets are at risk (D, E, F, G rated) and prioritise those requiring upgrades.
Plan improvements early: Heating systems, insulation, glazing, lighting, building controls, and renewable energy will all be key levers.
Check and register exemptions: Some properties may qualify for valid exemptions (e.g. due to cost or structural constraints). These must be registered to be relied upon.
Document decision-making: Keep clear records of assessments, cost-benefit analyses, and upgrade plans. These may prove crucial in defending against enforcement action or negotiating leases.
Revisit lease drafting & landlord rights: Ensure leases give landlords power to carry out upgrades or require tenant cooperation where needed.
Monitor policy developments: The Government is consulting on further reforms to the Energy Performance of Buildings (EPB) regime.
If you are a tenant or a landlord and require advice on a commercial lease or any other property issue, then contact Ting Lok in the Commercial Property team at Clarkson Wright & Jakes on 01689 887887 or email ting.lok@cwj.co.uk
References:
• https://www.gov.uk/guidance/non-domesticprivate-rented-property-minimum-energyefficiency-standard-landlord-guidance
Note – the above is not to provide legal advice; it is intended to provide information of general interest about current legal issues.