Legislation Changes that will affect occupiers of all commercial premises

Tom Lawrence

Tom Lawrence - Credit: Archant

Legislative changes due to come into effect from April 2018 could have significant implications for owners and occupiers of commercial buildings that do not meet minimum energy performance standards.

Most owners and occupiers of commercial premises will already be aware of energy performance certificates (EPCs) which, for commercial premises, were introduced in 2008 by the Energy Performance of Buildings (Certificates and Inspections) (England and Wales)

Regulations 2007. Subject to certain exclusions, whenever a building is to be sold or let, the seller or landlord must provide an EPC and recommendation report to the prospective buyer or tenant, free of charge at the earliest opportunity. An EPC is a certificate that provides information about the energy efficiency of a building in the form of a rating ranging from ‘A’ being the most efficient to ‘G’ being the least efficient. The accompanying recommendation report contains suggestions for improvements of the energy performance of the building. These are categorised as cost-efficient alterations and measures that require a higher level of expenditure. From April 2018 provisions contained in the Energy Act 2011 will make it unlawful for a property to be sold or let if it has failed to achieve a minimum prescribed energy performance standard. It is anticipated that the required minimum standard will be an EPC energy rating of ‘E’. It is estimated that of the commercial properties that presently have an EPC approximately 20% have an EPC energy rating of ‘F’ or ‘G’ (i.e. below the anticipated required minimum standard).

EPCs have a lifespan of 10 years and by the time the changes come into effect in 2018 EPCs that were produced when the 2007 Regulations first came into force will have reached, or be approaching, their expiry. Owners and occupiers should be wary of making the assumption that properties will have the same EPC rating on the renewal of an EPC, particularly if alterations have been made to the property in the interim period. The legislation will affect both owners intending to sell or let their properties and occupiers wishing to assign their lease or sublet space.

At this stage the exact details of how the legislation will operate are not fully defined however, it has the potential to have a dramatic impact on the investment required on energy efficiency in buildings which in turn could have a significant impact on the buying and letting of commercial properties.

For more information please contact Tom Lawrence at Brethertons LLP on: 01295 661427 or tomlawrence@brethertons.co.uk