Is your commercial property ready to take the heat?
With now less than one year until the first round of the Minimum Energy Efficiency Standards (MEES) Regulations 2015* come into force on 1 April 2018, now is the time that both commercial landlords and tenants should check if their property will be ready to comply next year.


How can I check?
You should check the property’s energy performance certificate (EPC), which is a certificate that gives information about how energy efficient a property is. It will show an asset rating, which is a numerical figure used to evaluate the energy efficiency based on a sliding scale, taking into account the property’s construction, insulation and how the property is heated or cooled. It is a theoretical figure as, in practice, different occupiers may be more, or less, energy conscious of energy consumption.
In addition to showing the numerical asset rating, it will also show the band a property falls into depending on its asset rating and these are indicated by letters; ‘A’ being the most energy efficient and ‘G’ being the least.
What do the MEES Regulations 2015 mean for landlords?

There are two important dates to be aware of; 1 April 2018 and 1 April 2023.
For landlords intending to let older and less energy efficient properties after 1 April 2018, now is the time to start taking any necessary measures to ensure your property will meet this mandatory minimum rating, particularly if there is a current tenant in the property where the lease term is due to expire after 1 April 2018 and the lease is excluded from the security of tenure provisions of Part II of the Landlord and Tenant Act 1954.
A good place to start is the recommendation report issued with an EPC detailing practical improvements to improve the property's energy efficiency and asset rating. Before carrying out any work, you should check that the lease permits you to enter the property to carry out any works and how much notice you need to give to the tenant. If you are granting a new lease that will extend beyond 1 April 2023, it would be prudent to ensure the lease contains necessary provisions to allow you to carry out any necessary works to improve the property’s asset rating and also to enter the property in order to have an EPC commissioned.


What does this mean for tenants?

If you are already occupying a commercial property under a tenancy that will not expire before 1 April 2018, your tenancy will be allowed to continue irrespective of the property's EPC asset rating until 1 April 2023, or earlier if the term expires before then. However, depending on when your tenancy expires, your landlord may require measures to be taken now to ensure the EPC rating is sufficient, should you wish to renew your lease or take a new one after 1 April 2018, or to ensure the premises can be re-let in the future.
Depending on any recommendation report, these measures could include replacing windows and other such works which could interrupt your business. You may wish to check the provisions of your lease to establish on what grounds the landlord can enter the property to carry out any works.
If you are a tenant who may be looking to take a new lease to be granted on or after 1 April 2018, as part of your investigations you should check the landlord supplies an EPC (unless the landlord is exempt from doing so) and that the asset rating is at least in band E to comply with the regulations.
If you are either a landlord or a tenant and wish to discuss any matters arising out of this article, please do not hesitate to contact Charlotte Mackenzie, or another member of our Commercial Property team, on clm@cooperburnett.com
or 01892 515022.
*Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 – SI 2015/962
