The Department of Energy and Climate Change advised that commercial building operators must achieve an EPC rating of ‘E’ or higher by 2018 if they want to continue to lease their properties.
On the 22nd July 2014, and after much anticipation from the market, the Department of Energy and Climate Change (DECC) released their consultation on the proposed Minimum Energy Performance Standards (MEPS) regulations.
There had been growing concern from the industry about how these regulations will impact activity in the market and, whilst the consultation has provided some direction about how the regulations will be enacted, substantial input from the industry was further required for the Government to implement these regulations realistically and effectively. Following the industry’s response, the Government delivered the final regulations in 2015.
How and when will the market be affected?
Data from the national EPC register in 2014 indicates that 18 per cent of commercial stock has EPC ratings of F or G and another 20% are rated E.
The regulations will apply from the 1st April 2018 as follows:
From the 1st April 2018, landlords of buildings within the scope of the MEES Regulations must not renew existing tenancies or grant new tenancies if the building has less than the minimum energy performance certificate (EPC) rating of E unless the landlord registers an exemption.
After 1 April 2023, landlords must not continue to let any buildings which have an EPC rating of less than E unless the landlord registers an exemption.
The minimum energy efficiency standard (MEES) apllies to the majority of commerical buildings, however, the Government has stated that leases of less than six months or over 99 years will be exempt.
This would only apply for properties that have an EPC already as the regulations are not empowered to change the regulations governing EPC requirements. Occupiers should also be aware of the regulations as sub-letting and assignments may also fall within scope.
If you have any questions regarding EPC ratings or MEES, please contact us.