New energy efficiency rules could turn up the heat on one in five commercial landlords

Property experts Mather Jamie are warning commercial landlords to be aware of recent changes to regulations on energy efficiency.

As of the start of April 2018 it became unlawful to let or sell properties in England and Wales which fail to meet the newly prescribed Minimum Energy Efficiency Standards (MEES), following changes to the law as a result of the Energy Act 2011.

MEES are a set of legal requirements that aim to improve the energy efficiency of private rented properties in the UK, and is estimated that one in five commercial properties do not currently meet these new legal standards.

With a few exceptions – such as listed buildings – all commercial properties marketed for sale or letting require an Energy Performance Certificate (EPC), giving the property an energy efficiency rating from A (most efficient) to G (least efficient). Properties which fail to achieve an E rating or above could be severely restricted when letting or renewing tenancies.

James Hunt, Commercial Management Surveyor at Mather Jamie said, “Owners of commercial properties should know that properties in their portfolio that don’t meet the new MEES ratings will need to be upgraded before they are put on the market.

“While current leases will not be affected by this change, further legislation due in April 2023 will affect all existing leases, plus new lettings, meaning all properties with an EPC rating below the threshold will need to have their energy efficiency improved, or landlords could face severe penalties, with fines of up to £150,000 per breach, per property.

“These necessary changes should be seen as a key priority for all landlords, and Mather Jamie can provide property owners with expert advice to ensure their property portfolio is ready for the increased scrutiny of energy efficiency within the property market.”

It is estimated by the Department for Communities and Local Government that non-dwellings (which include commercial properties) are responsible for almost 20% of the UK’s energy consumption and carbon emissions.