18% of non-domestic buildings have an EPC rating of F or G. If you fall within this percentage you are at risk of being caught out by new legislation!
As of April 2018, it will be unlawful for landlords to grant a new lease of commercial properties that have an EPC rating below E. Those that fail to meet the new standards are at risk of facing fines of between £5,000 and £150,000, depending on the value of the property.
The new Minimum Energy Performance Standards (MEPS), otherwise known as the Minimum Energy Efficiency Standards (MEES) will put these regulations in place. The legislation ensures that all rental properties in England and Wales that require an EPC, in accordance with the 2012 Energy Performance Building Regulations, are improving the energy efficiency of their buildings.
Statistics taken from the national EPC register show that 18% of non-domestic buildings have an EPC rating of either F or G, with a further 20% rated as E. These new regulations will mean that landlords must improve the energy performance rating of their commercial properties if they fall within this 18%, or they are at risk of being fined.
This legislation is the first phase of a long term plan to work towards achieving the UK’s legislative targets where, by 2050, CO2 emissions of all buildings should be ‘close to zero’. This legislation will only tighten, with the second phase due to commence 1st April 2023. This phase will act as a hard regulatory “backstop” and will apply to all let properties as opposed to only new lets.
Although the new legislation takes effect 1st April 2018, landlords must take action now to ensure that they comfortably meet energy rating requirements by this date to avoid facing penalties.
Peter Leggett, a Carbon and Energy Consultant, revealed that “Often building owners or managers leave it to the very last minute to comply with changes in legislation” and went onto say “The sooner you start improving energy performance the sooner the energy bill cost reduces for landlords and their tenants. For property managers they must give consideration to the scale of penalties for non- compliance, which under MEES could rise to 20% of rateable value”.
April 2018 may seem far away at this point, but there is a lot of preparation involved in improving the energy performance certificate ratings of a property.