April 2018 marks changes to legislation which will make it unlawful to agree a new lease (including lease renewals) for a commercial property with an Energy Performance Certificate (EPC) rating below an E. This will expand to include all privately rented property from 1st April 2023.
The new laws may require some landlords and property owners to make targeted improvements to their buildings in order to get their energy efficiency up to standard; which is likely to take some time to implement.
As of February 2016 estimates suggest that around 21% of non-domestic properties have an EPC rating of an F or G, leading these properties to fall short of the target E rating or above
Financial penalties for non-compliance will be linked to the rateable value of the property, but could be as much as £150,000.
There are some instances that have been underlined by the Government where Landlords may be exempt from compliance with MEES.
Landlords can be made exempt if they are able to demonstrate one of the following:
They have carried out all cost-effective energy efficiency improvements.
Measures identified by Green Deal or an alternative government scheme are not cost effective.
If third-party consents are not available.
Landlords and their agents should check their current EPC and follow recommendations should it be an F or G rating. Following this a further Energy Performance Certificate should be commissioned to achieve the target rating of E or above.