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Allow yourself five minutes to check your Energy Performance Certificate (EPC) today and it may save you time, aggravation and a lot of money in a few months’ time.

Government legislation now states it is unlawful to grant a new tenancy or extend an existing lease for a property with an EPC rating of F or G. There will be financial penalties for not complying with the legislation, therefore we recommend landlords carry out some simple checks sooner rather than later.

The legislation will also extend to all existing commercial leases from April 2023. So even if you think the regulations do not affect you straight away, it is essential you properly plan to ensure you can continue to let your property in the future.

Figures from the Office for National Statistics (ONS) highlight that 9% of non-domestic properties in Bedfordshire are in the danger zone of an F or G rating. These figures are fairly typical across the whole country so ask yourself the question – is your building one of them?

Energy Efficiency

EPCs were introduced in 2008 but only have a 10-year lifespan before they need renewing. You will therefore need to consider the following:

• Checking your current EPC will help you identify whether it contains inaccurate information. Many historical EPCs were obtained as economically as possible with little attention to detail. Being based upon wrong assumptions has left many properties vulnerable and has dropped them unnecessarily into the danger zone.
• Review when you last inspected your premises. For example, has your tenant installed air conditioning or carried out any other unauthorised works which has had a negative or positive impact on the EPC rating of your property?

Looking further ahead

It doesn’t stop at F and G rated properties. The Government is currently consulting on bringing in tighter legislation by 2030. They are consulting on whether to make it unlawful to let a commercial property with an EPC rating below a C, or possibly even a B.  It is worth bearing this in mind and to get the right advice and plan ahead now.

Risks

In addition to the fines imposed on poorly rated F and G properties, the following is affected:

• Valuations, as many financial institutions are refusing to lend against sub-standard properties with an inefficient energy rating.
• Rent reviews, as tenants realise how uneconomical their building is to occupy.
• Tenants who wish to sub-let their buildings (as they will subsequently become a new landlord).
• Any company wishing to restructure, which will subsequently trigger the need for a new lease and new EPC.

We can help

It is the landlord’s responsibility to ensure their property has a valid EPC.  However, many will be unaware of what their current EPC rating actually is. Although the regulations appear to be another burden for the landlord, we believe they should be seen as an opportunity to enhance the energy efficiency of their properties. Yes, there may be costs involved, however you should see this as a chance to make improvements to extend the long-term value of the building.

For further information about how we can help you improve your EPC, please contact Robert Franklin.

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