Change in Regulation to Energy Performance Certificates for Commercial Property-what you should know as Landlord to avoid unnecessary difficulties

11 April 2019

Peter Rooney, Tozers LLP

In this latest article from CLA ENews Partner, Tozers LLP, Solicitor Peter Rooney talks about the new EPC regulations for commercial let properties. 

Peter is a Solicitor specialising in commercial property in the Property Team, having qualified with Tozers in 2019. Peter has experience in a wide range of commercial property transactions including business sales, purchases and tenancies as well as dealings with agricultural land and holiday letting complexes.

"If you are a Landlord with commercial property, please read the information below to see if the new regulation could affect you and what steps you can take to avoid any potential delay in future transactions of your property.

Energy Performance Certificates (EPC) assess how energy efficient a building is from A to G. From 1 April 2018, regulations regarding EPC’s have changed as part of an ongoing effort from the government to tackle climate change. Fundamentally, this means that from this date, it has been unlawful for a landlord to let a commercial property with an EPC rating lower than E (i.e. F or G), unless the commercial property falls into one of the below exemptions.

Exemptions 

  • Listed or officially protected and the minimum energy performance requirements would unacceptably alter it.
  • A temporary building only going to be used for 2 years or less.
  • Used as a place of worship or for other religious activities.
  • An industrial site, workshop or non-residential agricultural building that doesn’t use much energy.
  • A detached building with a total floor space under 50 square meters.
  • Due to be demolished by the seller or landlord and they have all the relevant planning and conservation consents.

What should I do if my Commercial Property is subject to the new regulation?

  •  If you do not currently have an EPC for your property and have let it out post 1 April 2018 or intend to let it out/ renew a commercial tenancy, it is important to arrange an EPC as soon as possible as you could be at risk of a potential fine if not remedied.
  • If you have a valid EPC for your property (an EPC is valid for 10 years from the date it is commissioned) but it is below the minimum threshold, you should take steps to make it more energy efficient to meet the minimum threshold before letting out or renewing to a tenant.
  • If your property is currently at the threshold (energy rating of E) or close to it, you should also seriously consider making it more energy efficient to avoid the potential of your property falling short when the next EPC for it is due to be commissioned.

Who should I get in touch with?

Failure to comply with the new regulation could lead to your local authority serving notice on you to address the situation and if not rectified, a potential fine between £500-£5000 based on the ratable value of the Property, not to mention the potential for significant delay in future transactions.

If you have concerns that your property could fall short of the new regulation you should get in touch with a Commercial Energy Assessor to assess the Property as soon as possible. For further information on the new regulation, whether it affects you and the best steps to take please do not hesitate to contact our commercial property team at Tozers on 01392 207020 who will be able to assist you further."

Tozers LLP 

The CLA is also able to advise on the matter of Energy Efficiency Performance regulations and has guidance notes available to download from our advice library. If you have a query, contact your regional office on 01249 700200 where one of our advisers should be able to help.