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New Rules for Commercial Landlords

A commercial properties’ EPC shows its current and potential energy rating, of which a series of features such as roof insulation, wall construction, heating controls, renewable technologies and lighting contribute to its rating.

It is estimated that approximately 20 per cent of commercial properties in the UK fall into this category, and the consequence of the changes coming into effect will make such buildings illegal to let unless they are upgraded to meet the new standards.

And whilst the owner of the property will ultimately be responsible for ensuring the necessary work is carried out to bring it up to the minimum energy rating - or face hefty civil penalties - Cathy Thomas, commercial property specialist at Banner Jones, advises that there are a number of elements of the legislation that landlords and prospect tenants should be aware of.

“Any landlord in the process of negotiating new commercial lease terms should bear in mind the energy efficiency changes, as well as the work needed to improve the properties’ energy rating,” she said. “But it may also be possible to share the burden of cost.
“For example, if the necessary alterations will substantially reduce utility bills, the tenant may view contributing towards such changes as a necessary investment, as running costs will be reduced in the long run.

“And whilst the legislation implemented in April 2018 is only to affect those currently negotiating a new lease on a commercial property, the rule will also apply to all existing tenancies from April 2020.

“Therefore, tenants and landlords alike may want to seek advice about how this legislation will affect them if they are discussing a new lease contract on a building that requires upgrading.”

If you would like assistance with any aspect of commercial property leasing, call our team today on 01246 560 560.

Stephen Gordon
  • Executive Director
  • Solicitor
  • Notary Public
  • Head of Business Legal Services

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