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A warning to landlords about EPCs

20.03.18

As we discussed in our last blog, one of the big changes facing landlords, especially in the commercial sector, is around Energy Performance Certificates (EPCs), with the rules changing on EPC ratings from April 1st. It will then be against the law in England and Wales for landlords to grant a new tenancy to either new or existing tenants if their property doesn’t have an Energy Performance Certificate rating of ‘E’ or above.

We asked an expert in this area, Daniel Montlake (MRICS) of Core Sustainability, to discuss in a guest blog the issue around the unreliability of past EPC audits which could well leave properties vulnerable to the new regulations. Over to Daniel:

As spring knocks on the door and the 1st of April MEES (Minimum Energy Efficiency Standards) deadline fast-approaches, we learn that a considerable number of properties and portfolio owners remain unprepared for the regulation coming into force.

With advances in EPC software and building regulations over the past five years or so, our experience of auditing properties has shown that those previously graded as compliant (E+ EPC rating) are regularly dropping by two grades, and often further, into non-compliance.

Armed with this knowledge, we encourage all properties with EPC assessments carried out in the less-than-recent past to be re-audited to avoid any unforeseen non-compliance. Whether improvement works have been completed or are planned, mitigate your risk by undertaking a reassessment and ensuring your rating and any renovation guidance result in assured MEES compliance.

Looking beyond vulnerabilities towards statutory fines of up to £150,000 for non-compliance of commercial assets, we foresee potential for notable commercial gains through an improvement in the calibre of tenant and a property’s degree of rent-elasticity.

Propelled by efficiency cost-savings or consumption-conscientiousness, as EPC ratings come to the fore in tenancy agreements, negotiations are likely to fall favourably to those buildings with superior ratings.

Demand for higher-rated properties and their potential to drive more advantageous rental terms than their lower-performing counterparts is where landlords are set to gain.

Whether you require a full EPC-audit or would like advice regarding your compliance, Core Sustainability’s qualified assessors have the expertise to guide you through MEES regulations.

Get in touch to discuss your MEES compliance requirements, or for any of our other services as listed below.