Time is running out for Commercial building owners and Landlords who have yet to comply with new regulations coming into force on 1st April. That’s the stark warning from Mike Sutton, GJS Dillon’s Director of Commercial Building Surveying.
After 1st April, if their property has an energy performance rating certificate (EPC) rating lower than E, Landlords cannot lawfully continue to let a property or complete a new lease with a tenant. The April deadline is the first milestone down the energy efficiency road for Landlords. In 2027, properties must have a C rating and it is likely that the rating will have to be a B rating in 2030.
Speaking at the launch of GJS Dillon’s Worcestershire Commercial Property Market Report, Mr Sutton said ‘Most offices UK-wide need to be upgraded to a B rating by 1 April 2030. That equates to more than 1 billion sq ft of office space in the market – ie 87% of stock. It’s a big ask’
‘We’re here to help’ offered Mr Sutton ‘The countdown has begun and early engagement is key. There are plenty of ways Landlords can make their properties more energy efficient, but it all takes planning given the costs they will incur’
Cherry Elliott, Head of Property at Higgs LLP and speaker at the event, added:
‘While the MEES regulations offer Landlords the opportunity to increase their capital values by making their properties more energy efficient, improvements are going to be costly. Landlords must consider whether the cost of upgrading non-compliant buildings outweighs the cost of an empty property or a fine. They should also consider acquiring a higher EPC rating now to ensure future compliance’
Ms Elliott pointed out that Landlords could apply for an exemption to continue to let a property despite it having an F or G rating. ‘We’re not advocating applying for an exemption for the sake of it’ she added ‘ We recommend they check the regulations apply and assess the cost of the energy improvements. If they are eligible for an exemption, then by all means come and speak to us’
One of the issues for Landlords is that improvements may need to be carried out while tenants are at the property. ‘Landlords might need to consider in any new or renewal leases, reserving the right to go in themselves or beefing up their repair notice clause to permit entry to make energy improvements’ advised Nyree Applegarth, Partner in Dispute Regulation and Litigation at Higgs LLP ‘Either way, they need to ensure their tenants co-operate with required energy efficiency works, without unreasonably interfering with their business’ she concluded.