EPC Regulation Changes for Commercial Property

Since 1^st April 2018 Commercial Landlords have only been permitted to grant a new tenancy or extend or renew an existing tenancy if the property had a minimum Energy Performance Certificate (EPC) of an E rating, unless a valid exemption is registered.

However, since 1^st April 2023 Commercial Landlords are required to obtain a minimum E rating EPC, unless there is a registered valid exemption for all properties, regardless of there being a change in tenancy or not. The only exemption to this (other than those valid registered exemptions) is if the property is currently empty and you are not planning to let it, in this situation you are not required to improve the EPC rating until a time where you plan to let the property.

Further proposed changes

There are further changes proposed to come into effect on 1^st April 2027 and 1^st April 2030. The first tranche of changes that are proposed to come into force on 1^st April 2027 would mean that all non-domestic rented properties would need have an EPC rating of C or above and this is then proposed to go one step further on 1^st April 2030 when it is proposed that the EPC rating required will be raised to B. 

Who is responsible for making these upgrades?

It is the responsibility of the Landlord to make any upgrades required to a property to bring it up to the compliant standard of EPC rating. The government guidance states that if the enforcement authority believes a landlord has failed to fulfil their obligations under the Regulations, they can be served with a compliance notice. If a breach of the Regulations is confirmed, a landlord may receive financial penalties for this.

What can you do to prepare for any future changes?

Although your property may currently meet the minimum requirement, they may not do when these proposed changes come in effect. To ensure you are meeting the requirements going forward, you should begin looking at the most recent recommendation report and taking the required steps to improve the rating, this would prevent any issues arising once the new regulations come into force.

Are there any exemptions to these regulations?

There are a number of exemptions that would mean that you do not need to meet the minimum EPC requirements, if any one of these apply, the regulations do not:

• Listed or officially protected and the minimum energy performance requirements would unacceptably alter it;
• A temporary building only going to be used for 2 years or less;
• Used as a place of worship or for other religious activities;
• An industrial site, workshop or non-residential agricultural building that doesn’t use much energy;
• A detached building with a total floor space under 50 square metres;
• Due to be demolished by the seller or landlord and they have all the relevant planning and conservation consents.

Additionally, properties are also exempt if all of the below are true:

• It’s due to be sold or rented out with vacant possession;
• It’s suitable for demolition and the site could be redeveloped;
• The buyer or tenant applied for planning permission to demolish it.

In addition to these exemptions, if a qualified surveyor deems the work to be undertaken as being not financially viable for the property and they confirm this in writing, you may also be exempt.

Any of these exemptions must be registered on the PRS exemption register through the local council.

If you require any further advice on the EPC requirements for your commercial property, please call 01242 574 244 and ask to speak to a member of our Commercial Property team.