Commercial Retrofit - The New 'Hot' Topic for Construction Projects

The UK Green Building Council ("UKGBC") have published a guide to support industry to retrofit the UK's poorly performing commercial buildings.

From 2023, every commercial building in the UK will require an energy performance certificate ("EPC") which rates its energy efficiency from grade A to G. The Government is seeking to strengthen these standards and has proposed that all commercial properties being let, have a minimum EPC rating of at least 'B' by 2030 and is considering a possible interim requirement of level 'C' by 2027. Buildings which fail to meet these new standards would require owners and landlords of commercial buildings to upgrade their stock.

The UKGBC's new guide is aimed at supporting industry professional and stakeholders, from landlords and building owners, as well as those that will need to be involved in the scoping, planning, delivery and management of commercial retrofits including architects, engineers, planners and facilities managers. Essentially, any group will benefit from this guidance who has the intention of supporting the successful delivery of net zero-focused retrofit projects.

This will provide huge business opportunities for building contractors who are willing to work on retrofit projects. However, the retrofit world presents some thought-provoking issues from a legal perspective, as stakeholders seek to ensure that their interests and liabilities are accurately recorded in a written contract. Key drafting challenges are likely to include the following:

Fitness for purpose: A retrofit project is to see that the building in question achieves a desired level of thermal efficiency, carbon output and/or wholelife cost. It is perhaps inevitable, therefore, that many retrofit contracts will be prepared with specific obligations, which impose absolute duties on the contractor to meet certain performance specification requirements. Contractors should undertake careful due diligence on both the legal terms and conditions and the technical schedules, to ensure that all such design obligations are clear, understood and capable of being complied with;

Design liability: Retrofitting involves a careful balancing of different components of a building and their impact on overall performance, with a beneficial change to one part quite easily causing detriment to another. In short, bespoke (and often complex) design solutions are often essential, in place of standardised solutions that may not have been properly thought through. Employers will naturally want a single point of design responsibility if issues arise later, but it may not always be feasible for a contractor to take such a risk profile on if multiple thirdparty designers have contributed to the solution in practice;

Intellectual property: Due to the relative newness of retrofit and the innovative and bespoke design solutions it is generating, both employers and contractors will naturally want a slice of the pie when it comes to IP ownership. This is a key commercial negotiation point, which should be clarified early between the parties so that everyone is clear how the designs will be utilised beyond the individual project in question.

Our Construction team at Forbes Solicitors are experts in providing advice on the scoping, planning, delivery and management of commercial projects and help ensure you are aiming towards the net-zero target.