08 March, 2023
In our previous newsletter we warned that the deadline for the latest changes brought in by the Minimum Energy Efficiency Standards (MEES) with regards to existing commercial leases was 1st April 2023. With this deadline looming, it is becoming apparent that many commercial landlords may not be prepared for the change.
As a reminder, the current position is that commercial landlords cannot grant a new lease if the EPC rating of a property is below an E. From 1st April 2023, this rule will apply to all continuing / existing leases as well as new ones. As such, from this date onwards all commercial properties must have an EPC rating of no less than an E unless you have registered a valid exemption.
It is worth noting that the maximum penalty per breach could be £150,000 and / or the details of the breach could be published on a public register. This could clearly mount up over a portfolio if you haven't taken preventative measures.
If no action has been taken to date, then you should consider if there is a valid exemption for the commercial property in question. You may be able to claim an exemption if any of the following apply:
Most of these exemptions are only valid for 5 years after which, you will need to try again to improve the EPC rating of the property to meet the minimum levels.
That might sound reasonable enough, but it is worth remembering that at present, the government plans are for the minimum EPC ratings to rise to a C in 2027 and a B in 2030. So, you may be able to apply for an exemption now but if the minimum ratings do increase as planned then there is no guarantee that when that exemption expires you will be apply to obtain another if the property still cannot be improved. If you haven't already done so, then it may be time to look further into the future when it comes to your commercial property portfolios and their energy efficiency.
For more information contact Richard Clithero in our Manufacturing & Engineering department via email or phone on 0333 207 1159. Alternatively send any question through to Forbes Solicitors via our online Contact Form.
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