Warning to landlords as new regulations loom
Landlords have been warned they face years of tightening regulations over which properties they can let – with the first new rules coming into force in a matter of days.
Bromwich Hardy partner Dawn Cooper says changes to energy efficiency standards which start on April 1 will change the face of commercial letting over the next seven years.
Dawn warned all landlords to be prepared for years of change as the government set tough new rules for the energy efficiency of commercial buildings under its Minimum Energy Efficiency Standards scheme.
“The first change in standards comes into force on April 1 as part of the government’s push to achieve net zero emissions by 2050,” Dawn said.
“It means that all tenanted commercial properties in the UK must have an Energy Performance Certificate rating of E or better, regardless of whether the tenancy is new.
“On April 1 2027 this requirement will increase to a rating of C, and three years later all commercially-let property will need to have an EPC rating of B or A.
“A lot of landlords are prepared for the change this April, and the great majority of buildings already meet the E rating standard. But as the standards tighten over the next seven years more and more buildings will require improvements to comply with the regulations.
“It is our experience that there is far less awareness across the industry of the long-term impact of these changes and we would urge landlords to start preparing now for what is coming.”
Dawn said Bromwich Hardy’s property management team had been advising landlords on steps they must take ahead of the April 1 deadline and also warning about the tougher regulations in the pipeline.
“If landlords don’t start acting quickly, the 2027 and 2030 regulations will be on them before they know it and it will be too late to make the energy efficiency changes to their buildings required by law. That could leave them sitting on properties which suddenly have little commercial value.”
Dawn said there were some exceptions to the regulations.
“Landlords will be exempt from having to comply with MEES if they can demonstrate that all cost-effective energy efficiency improvements have been carried out, consent to undertake works is refused by a third party, or a suitably qualified expert provides written advice that the improvements would result in a devaluation of the property by 5% or more, or that the works would damage the property. Exemptions last for five years and will need to be lodged on a centralised register to be created by the government.”
Dawn said tenants looking to lease a commercial property should also be careful to check the building's history and make sure it has an EPC rating of E or above. Failure to do so could result in disruption, eviction, or even the potential of having to pay a contribution cost towards energy improvement.
Bromwich Hardy is one of the country’s largest independent commercial property agencies, regularly featuring in independent lists of the most active firms in the industry.
It was named this month as the most active agent for Warwickshire for the ninth year running as part of the 2022 Annual EG Radius awards and won four awards from industry data experts CoStar for its work in Coventry and Warwickshire.
22 March 2023