Commercial Property Solicitor Hannah Martin, of Frettens Solicitors, answers your questions on Energy Performance Certificates and the upcoming changes to them.

What is an EPC for property?

Energy Performance Certificates (or EPCs) are documents which evaluate the energy efficiency of a property and grade it anywhere from an A to a G based on how efficient a property is.

A rating of A is best rating available, with a G being the worst.

EPCs are valid for 10 years and remain valid for all transactions within this period.

EPCs are regulated by the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.

The regulations aim to reduce the carbon dioxide emission of properties and ‘call out’ non-domestic properties which are not energy efficient.

Is an EPC a legal requirement?

When a commercial property is sold, rented or constructed an EPC must be in place. This is a legal requirement.

A landlord will be required to ensure that a valid EPC is registered against the property for the entirety of a letting.

Under the current regulations a landlord is required to provide a valid EPC when granting a new lease of a property.

This may be granting a new lease to a new tenant or renewing a lease with an existing tenant.

Are EPC rules changing?

Yes, Energy Performance Certificate rules are changing next year. As a landlord, you’ll need to make sure that you’re ready for these changes well in advance.

From 1 April 2023, a landlord will not lawfully be allowed to continue any lease over a property which does not hold a valid EPC rating.

Therefore, landlords should start looking to improve the EPC rating of a property where this is necessary.

What if the new EPC regulations are breached?

If there has been a breach under the EPC regulations, for example the landlord has let a property that has a rating less than E, the enforcement agency has up to 12 months to serve notice of the breach.

The landlord will then be required to undertake the necessary works to the property.

Landlords should be aware that failure to comply with the regulations can lead to a penalty of up to £5,000.

Who pays to improve an EPC rating?

A landlord would be wrong to assume the costs of putting right a sub-standard property is the tenant’s responsibility or that they can reclaim the costs.

Many leases prohibit a tenant undertaking works to the property even when they are required to keep the property in good repair and condition.

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