18-10-2017

Changes Afoot for Commercial Landlords

The Regulations do not apply to buildings which are not required to have an EPC , such as industrial sites, workshops, buildings where the EPC is over 10 years old or where there is no EPC, tenancies of less than 6 months or for tenancies of over 99 years.

There are also some exemptions from compliance and broadly these are:-

  1. Where third party consent for the works required from someone such as a superior landlord or planning authority is denied;
  2. If energy efficiency improvements would adversely impact value of the building;
  3. All improvements possible at no upfront cost have been made, but the efficiency rating is still below an E.

In all cases, the exemptions cannot be transferred to a new landlord and are only valid for 5 years. All exemptions have to be registered on a central government register.

Where the Regulations do apply, Landlords will have to carry out works to bring their properties up to the minimum energy rating, or they will face hefty civil penalties. Landlords should be urgently considering their property portfolio and identifying any works that need to be carried out to properties caught by the Regulations. Any Landlord in the process of negotiating new commercial lease terms should bear in mind changes that may be needed to the property to improve its energy rating and whether or not the cost of such alterations can be passed to or shared with the proposed tenant. A landlord should also consider specifically stating in the lease that alterations which could reduce the energy efficiency of a property should not be permitted under the terms of the lease.

If you would like assistance with any aspect of commercial property leasing, call specialist Cathy Thomas on 0114 275 5266.