Changes to EPCs needed for commercial premises

09 Dec 2022

Commercial landlords need to be aware of a recently announced change to rules that will affect all privately rented commercial property, says Mark Egner, senior associate at rradar. An energy performance certificate (EPC) gives a building an energy efficiency rating from A to G, with A being the most energy efficient. If you intend to rent out a premises, you will need an EPC.

EPCs were introduced to inform and educate potential buyers or tenants about a building’s energy performance. The assessment addresses both the building fabric and its main services (heating, lighting, air conditioning) to produce an asset rating that indicates how efficiently the building has been designed. EPCs are required when a commercial building over 50m² is built, sold or rented.

Minimum energy rating for commercial premises
Since April 2018, commercial landlords must ensure their properties have an EPC rating of at least E when granting a new tenancy to new or existing tenants. From April 2023, commercial properties must be rated at least E even if there is no change in tenancy arrangements.

When an EPC is needed
You must have an EPC:

To let or sell premises;
When a building under construction is finished; and
If there are changes to the number of parts used for separate occupation and these changes involve providing or extending fixed heating, air conditioning or mechanical ventilation systems.

You won’t need an EPC if the building is:

Listed or officially protected and the minimum energy performance requirements would unacceptably alter it;
A temporary building which will be used for two years or less;
Used as a place of worship or for other religious activities;
An industrial site, workshop or non-residential agricultural building that doesn’t use much energy;
A detached building with a total floor space under 50 square metres;
Due to be demolished or planning permission to demolish it has been applied for; or
Due to be sold or rented out with vacant possession.

How to get an EPC
You can get an EPC from a commercial energy assessor. EPCs are valid for ten years.

You can be fined between £500 and £5,000 if you don’t make an EPC available to a prospective tenant or buyer. You might also get a financial penalty if your commercial premises do not have the minimum energy efficiency rating.

What you need to do now
It’s clear that failing to comply with the new rules can have significant consequences; you will need to conduct an urgent review of your properties, the current EPC status of those properties and what is needed to bring non-compliant properties up to standard.

You are also encouraged to get legal advice and guidance as soon as possible in order to understand your obligations.