How can the Commercial EPC certificate help you as a landlord?
A commercial EPC certificate is required whenever a landlord grants, or renews the lease on their commercial property.
Firstly, as this is a legal requirement at completion stage of the lease, not having the EPC in place will make you liable for a fine. The penalty for failing to make an EPC available to any prospective tenant is fixed, in most cases, at 12.5% of the rateable value of the building, subject to a minimum penalty of £500 and a maximum of £5,000. If you are fined on a particular property, trading standards will usually look through the rest of a landlords portfolio, meaning if you have multiple properties, you could be landed with multiple fines of £5000 per property!
Secondly, for those landlords commissioning a Commercial EPC certificate, it will give them an idea of the energy efficiency rating of their property. This will let them see if the property is an E rating or above, this being the minimum legal requirement to rent or lease a property. Any property with an inspected rating of F or G, cannot have a lease granted or renewed until it is brought up to spec. This is under a government scheme called MINIMUM ENERGY EFFICIENCY STANDARDS (MEES).
This scheme was put in place to meet obligations to improve energy efficiency in the UK’s commercial property stocks, under the Energy Act 2011, and to meet UK targets of CO2 reduction.
As the EPC comes with an additional ‘Recommendation Report’, this together with discussions between the landlord and the assessor, will allow them to come up with a package of improvements to bring the property in line with MEES.
Certain exceptions to the MEES apply, but involve applying to a government register.
Finally, even if a property is inspected at E rating or above, the Commercial EPC certificate, recommendation report, and discussions between assessor and landlord could lead to the landlord installing energy saving measures, or renewable technologies, which will improve the energy efficiency rating, and may just make the property more attractive to rent than other properties in the area or price range.
Although at the moment the above guidelines and restrictions only apply to all properties renewing or granting leases, from April 2023, the guidelines will apply to ALL commercial properties. This means that even if the lease is only part way through, if the property is rated F or G, it will need to be improved.