Commercial landlords urged to note energy efficiency rule changes

The rules on energy efficiency in commercial properties have changed – and there are some severe penalties being threatened for non-compliance.

In our latest blog, ehB Commercial director Simon Hain explains what this means for landlords…

As of April 1, a new legal standard for minimum energy efficiency applies to rented property in England and Wales.

What this means is that, in most cases, it will be unlawful to let residential or commercial premises with an Energy Performance Certificate (EPC) rating of F or G – the two lowest grades of energy efficiency.

Known as the Minimum Energy Efficiency Standards (MEES), the regulations will have a significant impact on landlords.

The Estates Gazette says more than one in ten commercial properties in England and Wales are at risk of being unlettable due to these new standards. In Warwick, this figure could be as high as 17.8 per cent of all commercial property.

The rules are not only far-reaching but also threaten severe financial penalties for non-compliance:

  • Where a breach has lasted for less than three months – a fine of up to £5,000 or (if greater) 10 per cent of the rateable value, with a maximum penalty of £50,000
  • Where a breach has lasted for three months or more – a fine of up to £10,000 or (if greater) 20 per cent of the rateable value, with a maximum penalty of £150,000

The regulations will be enforced by Trading Standards officers.

In the future…

The regulations will initially be enforced when new leases are granted and existing leases are renewed.

However, from April 1, 2023, this will be extended to cover all leases, including where a lease is already in place.

It will not apply to properties which aren’t required to have an EPC, such as listed buildings. It also won’t apply to lettings of six months or fewer, or 99 years or more. However, the regulations will apply to sub-lettings and assignments.

A changing landscape…

It is worth noting that EPC conventions have been updated five times since the standards were introduced in 2010.  Therefore, EPCs which have a current rating of E which were undertaken more than five years ago are particularly vulnerable once the EPC expires after a decade.

It is our advice to our clients to ensure that all property assets have a valid EPC and that an energy performance plan is put in place to improve the energy efficiency of the property.

Our Surveying Team

Jonathan Blood

Jon is as assistant surveyor and an associate member of the Royal Institute of Chartered Surveyors.  He is currently undertaking the APC with a view to becoming a fully qualified chartered surveyor in the near future. Having graduated with a BA (Hons) degree from Sheffield University Jon started his career in Residential Agency whereby he became a member of the National Association of Estate Agents and subsequently also successfully completed a BTEC in Residential Lettings Management.  Having made the transition to commercial property , he started out as an office agent in Birmingham focusing on both the city and out of town markets. Areas Jon cover include: Commercial Agency, Acquisitions and Commercial Property Management.

Scott Blake

Scott is a Chartered Surveyor having worked in general practice surveying in the West Midlands area since 1991and mainly within the Coventry and Warwickshire area. He has a wide range of experience dealing with commercial property matters including professional valuation services for private and corporate clients, other professional work including rent reviews, lease renewals, business rate appeals as well as commercial agency investment acquisitions and disposals. Scott is a director of ehB Reeves.

Simon Hain

Simon Hain has worked as a commercial property consultant in Leamington Spa since 1984 and has been very active within the local community and is a former chairman of Leamington and District Round Table and trustee of various local charities. Simon specialises in Commercial Agency, Development, Acquisitions and Corporate Property Advice and is a director of ehB Reeves.

Nick Evans

Nick is a Chartered Surveyor who has worked in Leamington Spa since 1992. Born in Warwick, Nick is a Fellow of the RICS, Registered Valuer, RICS Accredited Mediator and former Chairman of the RICS Coventry and Warwickshire Local Association. Nick generally concentrates on Valuation and Professional / Landlord and Tenant work as well as Investments and Corporate Property Advice for clients and is a director of ehB Reeves.  

Nigel Grugeon

Nigel is a Chartered Surveyor with over 40 years' experience in General Practice. Originally with a background in commercial property he has for many years concentrated on providing general consultancy advice to his many charity clients throughout the UK, occasionally involving properties in Ireland, France, Belgium and Italy. Nigel’s work covers a wide range of activities associated with charity owned properties which include the sales and acquisitions of substantial Estates, of properties in the healthcare and education sectors as well as development land and conventional domestic residences. Formerly based in the City of London, Nigel joined Reeves & Partners in 2010 adding his many clients to the firm's already substantial charity client base.

Phil Harvey

Having joined Reeves & Partners in 2011, Phil has over 18 years’ experience in the Property industry specialising in Commercial Property Management. Phil works closely with a wide range of clients including private investment companies, pension fund operators and religious organisations advising on all aspects of Property and asset management. Phil is an experienced and valued member of the Property Management team and has acted across a wide range of property sectors including residential, industrial, office and retail. Outside of the office, Phil enjoys music, reading and Formula One.

Richard Pomfret

Richard is a Chartered Surveyor with approaching 40 years’ experience in the Coventry, West Midlands and Warwickshire areas and has a wide knowledge of general practice surveying disciplines. He was a partner with Locke and England when the firm sold to Lloyds Bank in 1987, and subsequently a director of Innes England running the Coventry office. Now based in Leamington Spa he heads up the firm’s agency, valuation and professional work and acts for a number of Charity organisations, for which the firm has particular expertise. Richard lives in Leamington Spa and is married with two children. Having retired as a rally co-driver slower pastimes now prevail including tennis, golf and fell walking.

Stuart Gregory

Stuart heads our property management department working closely with clients to maximise returns from their property assets. He advises a number of private investors, high net worth individuals, property companies, pension funds and organisations with a charitable status, dealing with all aspects of the management of their property investments. Stuart is a Chartered Surveyor with over 25 years’ experience in Landlord & Tenant and general practice work in the West Midlands and Warwickshire. He joined Reeves & Partners in 2001 and is a Director of the firm.  

Sam Hain

Sam Hain joined us in the summer of 2017, shortly after graduating from the University of the West of England, Bristol with a BA (Hons) in Politics and International Relations

Sam started work in asset management department, working as a graduate asset manager and will soon be starting his assessment of professional competence (APC) - the on-the-job training scheme graduates need to complete to qualify as a chartered surveyor.

Sam grew up in Warwickshire and attended Warwick School and outside of work, he enjoys playing golf and football and is a Coventry City supporter.