As a landlord, it is important to be aware of the recent changes to the Minimum Energy Efficiency Standards (MEES) for commercial properties. Previously, it was unlawful to lease a commercial property with an Energy Performance Certificate (EPC) rating of F or G.
However, from 1 April 2023, you are not lawfully able to continue letting out a property with an EPC rating of an F or a G. This means that it is crucial to reassess the energy performance level of your commercial property, particularly if it currently has an F or G rating.
If your property has an EPC rating below the minimum E rating required, there are financial penalties that range from £5,000 to £150,000 and breaches of the MEES Regulations could also be published on a publicly available register. In addition, future tenants are likely to check a property’s MEES compliance before leasing so landlords could lose rental income if they fail to meet the required standards too. It is, therefore, important to take the necessary steps to ensure your property is compliant.
There are some exemptions to the MEES regulations, such as if the improvement works would damage the property or result in a devaluation of 5% or more of the property value, or if all energy efficiency improvements that are cost-effective have already been carried out. However, these exemptions will only last for five years and are only valid if properly registered.
In addition, landlords should be aware that there are recommendations that, from 1 April 2027, commercial properties must meet a raised EPC rating of a C to be lawfully let out, with a further rise to a B proposed from 1 April 2030. It is important to keep these future changes in mind and plan accordingly.