Don’t get caught out, here’s everything you need to know…
The Government are tightening their Minimum Energy Efficiency Standards (MEES) for commercial properties on April 1st.
What are the current Minimum Energy Efficiency Standards (MEES)?
As it stands, commercial properties are under no obligation to comply with the Minimum Energy Efficiency Standards (MEES), meaning commercial properties can have an EPC rating A to G.
This is because MEES were initially intended as a guideline for properties – both domestic and non-domestic.
However, domestic properties need to have an EPC rating of E or above to meet the current Minimum Energy Efficiency Standards, which is now extending to commercial properties in April 2023.
What does the MEES changes mean for commercial landlords?
It will be unlawful to lease a commercial property with an EPC rating below E from April 1st, 2023.
Additionally, landlords will not be able to renew a commercial tenancy if their property falls below the new Minimum Energy Efficiency Standards.
Fines for continuing to let a commercial property or granting a new lease, whilst the EPC rating falls below the new requirements, range between £5,000 and £150,000.
An EPC rating of E or above will be the new Minimum Energy Efficiency Standard for commercial properties since the legislation was introduced in 2015.
Does this affect commercial tenants?
While the new MEES requirements directly target landlords of commercial builds, this could affect tenants if the property falls below the new EPC standards.
Landlords may ask tenants for consent to access the property, allowing for energy efficiency upgrade work to be carried out, or contributions towards the cost of works.
In some circumstances, tenants may have to leave the premises altogether. In this instance, The Deregulation Act protects against unfair eviction in relation to the building’s energy efficiency issues.
What commercial landlords need to do next
It is essential that commercial landlords improve their EPC rating to EPC E or above before April 1st, 2023.
Consulting a building surveyor is the best way to find out your buildings current EPC rate and any potential upgrade work needed to meet the new MEES.
Without the advice of a chartered surveyor, landlords run the risk of providing the wrong EPC rating – leading to hefty fines and insufficient upgrade works at the expense of the landlord.
Types of improvements a building surveyor could suggest:
- Switching to LED lightbulbs
- Solar panelling
- Boiler replacement
- Wall insulation
- Double glazing
How will energy upgrade works affect my property?
The obvious point here is that your property will be compliant with the new Minimum Energy Efficiency Standards, allowing your property to take on new tenants, renew leases, and be sold to new owners.
Additionally, the energy upgrade work could improve the value of your property and reduce the cost of bills in the long term.
However, landlords will need to be mindful of outgoing tenants and their dilapidations liabilities. Talk to your chartered building surveyor to discuss further.
managing Director, Alex Hurn, commented; “There is a ‘Cost Cap’ on upgrade works and under the current legislation you will never be required to spend more than £3,500 including VAT on energy efficiency improvements”.
Are there any exemptions?
Whether it’s a shop, holiday let, or an industrial site, there are some buildings which are not required to meet the Minimum Energy Efficiency Standards.
Here are some of the main examples:
- Short term lease of 6 months or less (cannot be a continuous rolling lease surpassing 12 months)
- Properties due to be demolished
- Leases exceeding 99 years
- Licences
- Listed buildings
Regardless of whether your property is a theme park or a restaurant, each type will come with its own individual paperwork. If you believe your commercial build is exempt from MEES, a form will need to be submitted online via The Private Rented Sector Registration.
About MEES
The Government introduced Energy Efficiency (Private Rented Property) (England & Wales) regulations in 2015, later coined ‘Minimum Energy Efficiency Standards’ (MEES).
The purpose of MEES is to reduce the UK’s carbon emissions and reach the Government’s 2050 net zero target.
MEES currently require domestic properties to have an EPC rating of E or above, now extending to commercial properties in April 2023.