Energy Efficiency for Commercial Properties
The Government have recently announced the proposal that any Commercial property starting a new tenancy will require an EPC rating of B or above. The idea is that this will be implemented in two stages lasting until 1st April 2030 to try and achieve net zero emissions by 2050.
Energy Performance Certificates (EPCs) are carried out by registered energy assessors to assess a property’s energy efficiency. They consider such things as insulation, walls, solar panels and the working of your boiler and heating system. Once they have gathered this information they will give your property a rating from A to G, A being the most efficient and G being the least. EPCs last 10 years and are obligatory when letting out a property.
From April 1st 2023, all non-domestic private rented property must have an EPC rating of E or above. The new minimum EPC requirement will therefore apply to any existing leases, not just new ones. This means it will be unlawful for a landlord to continue to let a commercial property with an EPC rating of less than E. The penalty for an EPC rating of below E is based on the rateable value of the property and will be between £10,000 and £150,000 per breach with details of the breach are authorised to be published.
The government are looking to then introduce two-year compliance windows for the next stages which will include dates that landlords are required to present a valid EPC and end with an enforcement date for each new EPC rating. For EPC C the Government proposes the compliance window should be 2025-2027, and for EPC B 2028-2030.
The first stage is expected to begin in April 2025 with landlords required to submit their new valid EPC rating. The Landlord must have a rating of C or above for the EPC to be compliant, but if not, the Landlord will be required to undertake any necessary works to bring the property up to a rating of C or above. A deadline of 1st April 2027 to complete these works and submit a valid EPC has been proposed.
The second stage implements a requirement of a valid EPC of B or above by 1st April 2028. However, if the landlord’s EPC is not up to a B, they have until 1st April 2030 to undertake the necessary works and submit a valid EPC.
Landlords should be checking the EPC ratings of their commercial properties and looking to future-proof them for the introduction of the new regulations as well as looking at what potential works need to be undertaken to improve the energy efficiency.
If you would like further information please contact our Commercial Property Department.