ENERGY
The future challenges of Minimum Energy Efficiency Standards
While it has been a legal requirement since 2008 to provide an Energy Performance Certificate ( EPC ) whenever a property is built , sold or rented , it was the introduction of Minimum Energy Efficiency Standards ( MEES ) Regulations in 2018 that created the beginnings of a pathway for trying to improve energy efficiency within buildings .
From 2018 it has been an offence to sell , grant a new lease or renew a new lease of a property that has a rating of F or G . Further tightening of the legislation was introduced in April 2020 , where privately rented residential properties could not be let with an EPC rating below an E .
The introduction of further regulations in April 2023 will see MEES apply to all privately rented commercial property , creating a situation where it will be an offence to let commercial property with an EPC rating below an E .
The introduction of MEES does not in itself create an obligation to prepare an EPC – it is the action triggered by construction , sale , letting or change in size of the building or unit that creates the obligation .
There are , however , some exceptions in which commercial MEES will not apply to leases for a term of less than six months or those greater than 99 years . Commercial buildings that do not require an EPC will also be exempt – for example , industrial sites with a low energy demand , places of worship , small standalone buildings ( total floor area of less than 50 sq m ) and temporary buildings .
The change in the legislation is also likely to create a revised strategy for the potential letting of vacant units and the preparation of EPCs .
Until now , it has been common practice to base an EPC on a prescribed set of assumptions and settings within the software , where specific information is not available . This , by default , creates a potentially lower rating than the one that would exist , if definitive information was available concerning the level of fitout that is to be provided .
Landlords should be mindful of the way in which a property is actually brought to the market and may also wish to review the fit-out completed by the tenant , proactively reassessing the existing EPC once the fit-out has been completed , as it may produce a more favourable rating .
As EPCs last for 10 years , or until superceded by a new one , careful consideration of the methodology behind their preparation is of increasingly great importance .
In some circumstances , it may not be possible for the environmental performance of a unit to be improved . There are a number of exemptions that can be applied , as follows : > Where are all relevant energy efficiency improvements as noted in the EPC recommendation report have been instigated , but the property still remains substandard
> Where the landlord requires the consent of the third party which cannot be obtained
> Where the landlord is required to grant a new lease of a substandard property subject to an agreement for lease or court order The above exemptions will apply for a term of five years , after which the landlord will be required to improve the EPC rating or apply for and register a further exemption .
Energy expert – Sanderson Weatherall ’ s David Fairley
What next for commercial MEES beyond 2023 ?
Proposals are in place to raise the MEES threshold for commercial properties to a B or C rating by April 1 2030 . Landlords should , therefore , ascertain which properties , if any , within their portfolio , may be substandard and assess the steps that need to be taken to ensure that such properties can continue to be let beyond 2023 , in compliance with MEES regulations .
Commercial properties with a rating of an F or G should be reassessed now to ascertain the extent to which improvements can be made .
David Fairley is a partner and accredited non-domestic energy assessor in Sanderson Weatherall ’ s building consultancy team . Please contact him on 01642 426900 to find out how the upcoming regulation changes may impact your properties .
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