Energy Performance Certificates (EPCs) are documents which evaluate the energy efficiency of a property and grade it anywhere from an A to a G based on how efficient a property is.
To let out a commercial property, your property must meet the minimum EPC rating. In this article, Hannah Martin outlines the current EPC requirements, who’s responsible for keeping a property ‘energy efficient’ and how the rules are changing.
What are the minimum EPC requirements for commercial property in 2023?
In order for a commercial property to be let to a tenant the Property must hold a valid EPC rating of E or above.
If you are purchasing the whole of a vacant commercial property then it simply has to have a valid EPC certificate and there is no minimum rating.
However, if you purchase a property with the intention of letting it out, it is advisable to ensure it has a minimum rating of E otherwise you would be required to undertake works to improve the rating before being able to let it.
What is the government plan for EPCs in commercial property?
Currently the government’s plan is to continue to increase the minimum rating required. They expect that by 2027 all let commercial property will be required to have a minimum rating of C with this then being increased further to B by 2030.
We are yet to receive any confirmation as to whether these changes will be implemented, so watch this space.
How can I prepare for these changes?
You can prepare for the government changes by ensuring that the Property holds a valid EPC rating, or falls into any exemptions being granted by the government.
As the landlord, you may wish to also look into the possibility of undertaking works to the Property over time with a view of improving the EPC rating.
If the works are going to be costly you may wish to start slowly making changes and it may be beneficial to look at the lease to see whether there is an obligation on the Tenant to undertake any works or to contribute towards the costs of improvements.
What happens if my property fails an EPC?
If you let a property which has a rating less than the governments minimum rating (currently E) you will be required to undertake works to the Property in order to bring the rating up.
Unless the property is exempt, it will need to have the minimum EPC rating in order for you to continue to let the Property.
Where the Property is already let, legal advice should be sought as to whether the Tenant or the Landlord is responsible for improving the Property but in either case the EPC rating will have to be improved to allow the letting to continue.
What commercial properties are exempt from EPC?
There are various criteria which can mean a property is exempt from the EPC regulations. The Government website can provide guidance on which properties and tenancies are exempt from these EPC regulations and the process required to claim these exemptions.
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