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Energy Rating for Commercial Property

View profile for Joe Foley
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Energy Efficiency Regulations* came into force in respect of commercial property on 1 October 2016.   The minimum energy efficiency standard has been set at an ‘E’ rating and a landlord of a sub-standard non-domestic private rented property must not grant a new tenancy on or after 1 April 2018, or continue to let the property on or after 1 April 2023 in respect of an existing tenancy, unless certain conditions apply.

A landlord may continue to let a property under certain conditions which include:

  • where the landlord of a sub standard property has made all the relevant energy improvements;
  •  there are no relevant energy improvements that can be made;
  • where in the preceding five years the landlord has been unable to obtain consent to carry out improvements due to a lack of consent from the tenant or a relevant third party;
  • where the landlord has obtained a valuation showing the improvement would decrease the market value of the property by more than 5%;
  • the landlord can obtain a temporary exemption for 6 months under certain conditions, including the tenant’s insolvency, or where the landlord has only just acquired the freehold or leasehold interest.

Where an exemption applies it is only valid if the property is entered on the exemptions register.

A landlord of a property that does not fall into any of the exclusions or exemptions will be required to bring their property up to an ‘E’ rating, even where the property is already let and occupied by a tenant.  However, tenants do need to be cautious to ensure that the obligations do not fall upon them under any existing lease obligations that require them to keep the property in good repair, and/or or to comply with statutory provisions affecting a property.

Landlords and Tenants should take advice when renewing existing leases to ensure that they do not fall foul of this law which is effective from 1st April 2018. 

Talbots Law’s Commercial Property Team are always on hand to discuss this and any other commercial property matter -  for more information or assistance call us now on 0800 118 1500.

 

*Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015