Energy Efficiency - Commercial Property

Energy Efficiency – Commercial Property

New regulations came into effect on 1 April 2018 which require
private rented properties to achieve a minimum standard of energy efficiency.

Can you be sure that your rented property is compliant? As from this date landlords will not be permitted to grant a lease or renew an existing lease of commercial premises with an energy rating less than E. 

A landlord who continues to let a commercial property which does not meet the minimum requirements after 1 April 2023, will be in breach of the regulations. This includes properties where a lease is already in place and a tenant is in occupation of the property. 

Whilst there are some temporary exemptions which might apply, any landlord who leases a property which does not meet the minimum requirements will be liable to enforcement action. This can include a financial penalty of up to £10,000 or 20% of the rateable value of the property (up to a maximum of £150,000,) publication in the Private Rented Sector Exemptions Register containing details of the breach, or both the financial & publications penalties. 

The regulations do not apply to short leases of less than 6 months or long leases granted for a term of 99 years or more. However, many leases being granted now, or even existing leases, will extend beyond 1 April 2023. Does your lease adequately address the following issues? 

• Who is responsible for carrying out any energy improvement works needed? 

• Does the landlord have a right to enter the property to carry out energy efficiency improvement works? 

• Who is responsible for the cost of those works? 

• Does the landlord have a right to break the lease if continuing to let the property would put the landlord in breach of the regulations? 

These are just a few of the potential issues which may arise. Commercial landlords and tenants are encouraged to consider and address these issues now, well in advance of the 1 April 2023 deadline. 

For further information or advice please contact Lisa Adams at Okells Francis Law, Church Row, Ross-on-Wye HR9 5HR or by email to ladams@okellls-law.co.uk