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New regulations governing the energy efficiency of commercial properties come into effect on the 1st April 2018.

As part of the new Minimum Energy Efficiency Standard (MEES), commercial buildings will need to have a minimum Energy Performance Certificate (EPC) rating of E in order for new or renewed leases to be granted.

The standard will apply for existing leases from 2023 and a significant proportion of the building stock will be affected by these regulations.

Adrian Walsh, partner and head of building consultancy at Bruton Knowles in Birmingham, said: “Landlords need to be reviewing their asset schedules to identify the properties with an EPC rating of F and G.

“Once these properties have been identified a re-run of the EPC should be undertaken as the existing EPC may not take into account any improvements made to the property or default values and inappropriate assumptions were made in the original assessment and modelling process.

“Potentially re-running the EPC process could bring the property up to an E rating, without having to invest significant capital expenditure.”
 
Early identification of measures that will achieve the minimum E rating and the determination of the nature of works to be undertaken is vital as this will allow capital expenditure to be managed accordingly.

Appropriate periods for undertaking the works needs to be considered, such as during periods of planned refurbishment and maintenance, though lease clauses should be reviewed around landlord’s access for undertaking works if the tenant is still in situ.

“There is still time to make improvements to obtain the minimum rating,” said Adrian. 

“However, if landlords do not review the EPC ratings and start to make improvements, they will not be able to lease their property, unless they have applied for an exemption, which will affect their rental income and value of their property.

“By undertaking works and improving the energy rating there is the additional benefits of reduced energy use and operating costs, which may be attractive to potential tenants.”

For help with reviewing their asset schedules, please contact Adrian Walsh on 0121 200 1100 or This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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