From 2018 it has been unlawful to let properties on a new lease with an EPC rating lower than E, but this is now set to change.
What is the current EPC requirement for commercial properties?
An Energy Performance Certificate (EPC) sets out how energy efficient a property is. It is required for both residential and commercial property. The EPC will rate the efficiency of the property from A (the most efficient) down to G (the least efficient). A valid EPC must be in place whenever a property is rented.
What was originally planned for 2030, and why?
The Government has set goals over the upcoming years on what the minimum energy efficiency rating should be in order for a commercial premises to be lawfully let. From April 2027, the minimum EPC rating must be C and from 2030, the minimum EPC must be either A or B. There is a maximum fine of £5,000 for failing to comply with this and Landlords are being urged to prepare now to meet these goals.
However, the Government still has not confirmed whether the upcoming deadlines are happening, leaving commercial landlords and tenants in limbo.
What are the potential costs and challenges of achieving EPC B?
Landlords may need to start improvements now. Not only would this be costly, with the cost of building upgrades being passed on to commercial tenants but planning permission may need to be sought, and the tenant may need to move out during this time, causing disruption to their business.
Landlords may also face difficulties securing mortgages or receive less favorable terms for properties with lower EPC ratings nearer to 2030.
What should Landlords do now?
Landlords should consider what they can do now to try and meet this deadline. For example:
- Restricting a tenant from carrying out works to the property that could have an adverse impact on the EPC rating.
- Restricting a tenant from obtaining an EPC certificate themselves.
- Begin carrying out the required improvements now.
- Arranging an energy assessment.
Final thoughts
Landlords should aim to obtain higher EPC standards than the minimum currently set at E where they can, to get ahead of more stringent standards coming in the future.
Our commercial property team can support you, please contact us on 0345 450 5558 or enquiries@stephens-scown.co.uk