Commercial landlords have just six months in which to improve the energy efficiency of buildings with EPC ratings lower than E before a new law comes into force prohibiting them from leasing them out or even renewing existing leases.
The Minimum Energy Efficiency Standard (MEES), which has applied to new leases in England and Wales since 2018, will extend to cover ongoing leases from April 2023.
Industry estimates suggest this will mean as many as ten per cent of commercial buildings in London alone will be unlettable – with huge financial implications for landlords.
Non-domestic property owners are being urged by water and energy compliance specialist Genex to take action ahead of the spring deadline to ensure their leases can continue to operate seamlessly.
The company specialises in carrying out EPC (Energy Performance Certificate) and MEES assessments whose findings will enable owners to improve their buildings to meet or exceed the required E rating.
Genex senior environmental consultant Wayne Maw explained: “Owners who continue to rent out non-compliant properties are subject to fines under this scheme. Others will suffer financial losses during the fallow period while work is carried out to upgrade existing building stock to the minimum levels.”
And while the new legislation requires an E rating or above, a consultation is under way into further tightening of the laws – with a possible minimum of a D or C rating demanded by 2027 and a B or above by 2030.
This means landlords asking Genex to carry out an EPC assessment in time for the April deadline could ask for its advice on improving the rating further, to avoid having to go through the process again in a few years’ time.
The EPC process can identify where energy efficiency improvements can be made. These could be straightforward actions, such as switching to LED lighting or installing insulation.
If it’s more complicated, or there is no obvious single solution Genex will prepare a MEES report, which provides suggestions on how to improve the EPC level.
A MEES report is also vital for buildings which may be exempt from energy efficiency improvements, such as listed buildings. An exemption, which may show that improvements aren’t financially viable, would only be granted with evidence outlined in the report.
Landlords concerned about the cost of improvements may take some comfort from the fact that soaring fuel prices will reduce the payback period.