Regulation changes to see rise in energy efficiency standards

From 1 April 2023, the Minimum Energy Efficiency Standards (MEES) regulations are set to become even stricter for commercial properties.

The regulations were introduced in 2015 to target the least energy efficient buildings and to help the UK reach its targets for reducing carbon emissions. Since April 2018, landlords of qualifying commercial property have needed to ensure that their properties comply, meaning that new leases with an Energy Performance Certificate (EPC) rating lower than an ‘E’ cannot be granted.

The 2023 MEES regulation changes will apply to all existing commercial leases, and it will be unlawful for landlords to continue to let commercial property with an Energy Performance Certificate (EPC) rating of ‘F’ or ‘G’.

How can landlords prepare for the changes?

It’s important for landlords of qualifying commercial property, which are subject to existing leases, to consult with experts in MEES. Specifically, they should consider getting updated
EPCs for properties that could be at risk, to establish whether action needs to be taken.

Energy efficient improvements may need to be carried out or an exemption may need to be registered on the Private Rented Sector (PRS) Exemptions Register if the property cannot be
improved to meet the minimum standard. For example, a landlord will be able to continue to let a substandard property where it can be shown that efficiency measures would decrease the
property’s value by 5% or more, or a temporary exemption of six months can be granted to new landlords.

What happens if landlords don’t act now?

Failure to make the necessary improvements or register an exemption could see landlords fined up to £150,000, depending on the type of property and length of the breach.

Our commercial property team can advise and support on engaging with existing occupants of properties where works need to be done, or ensuring that existing and/or new leases include
relevant EPC provisions. Please do get in touch; we’d be happy to help.

Charlotte is a solicitor in our commercial property & charities team. She advises a broad range of clients on all types of commercial property transactions including the acquisition, development and disposal of freehold and leasehold property.