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

Oliver Shelley

Oliver joined us at the start of 2023, shortly after graduating from the University of Nottingham and Trent with a BSc (Hons) in Real Estate Management. Oliver started work in the agency department and also assists in aspects of asset management as well as professional services. Oliver 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. Oliver grew up in Solihull and attended Solihull School and outside of work, he enjoys playing tennis going to the gym and cooking healthy meals.

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.  

Scott Blake

Scott is a Chartered Surveyor having worked in general practice surveying in the West Midlands area since 1991 and 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.

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.  

Robert Hawkins

Robert is a Chartered Surveyor with extensive experience in the property business, having worked on both sides of the fence, as adviser and client, in all market sectors and on properties and portfolios large and small. He enjoys dealing with all aspects of commercial property and acting for all types of client.

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.

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.

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 is now very active in the agency department. Having obtained an MSc degree in Real Estate Management, Sam has started his assessment of professional competence (APC) - the on-the-job training scheme graduates need to complete to qualify as a chartered surveyor and hopes to qualify in the winter of 2023.

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.

Adam Boxer

Adam joined ehB Reeves in 2019 as Facilities Manager and forms part of the Property Management department.

 Adam’s primary responsibilities are to look after the reactive and planned maintenance for managed properties as well as understanding and reacting to their Health & Safety requirements. Adam also looks after all facilities management services to managed properties and has responsibility for a broad and diverse range of contracts across the portfolio.

 He is a member of the Institute of Workplace and Facilities Management (IWFM) and a Technical Member of the Institute of Occupational Safety & Health (IOSH).