Landlords of Non-Domestic Properties - Are You MEES Compliant?

Landlords of commercial properties will be aware that (subject to an exemption) since 1 April 2018, it has been unlawful to grant or renew a tenancy of sub-standard property, being a property that has an Energy Performance Certificate (EPC) rating of ‘F’ or ‘G’.

From 1 April 2023, it will be unlawful to allow a lease of sub-standard property, which may have otherwise been lawfully granted before 1 April 2018, to continue unless an exemption applies and that exemption has been registered on the exemptions register.

If landlords have not already done so, they need to start thinking about what they should be doing to prepare and if any action needs to be taken to stay compliant and to minimise the risk of enforcement action, for example:

• Landlords should start by auditing their portfolios and checking whether each property has an EPC rating of at least an E. An initial strategy can then be implemented to determine which properties need prioritising for further action. 
• Landlords should, however, take caution when acting on an existing EPC as EPC ratings can be subject to significant change through various factors, including a tenant’s fit-out, an existing EPC having been carried out several years prior or a previous EPC simply being poorly prepared. It is important to ensure an existing EPC is completely accurate before using it as a baseline and considering improvement measures. 
• Landlords should also consider certain factors to establish the urgency with which they should consider addressing a property’s EPC rating. For example, if a lease is due to come to an end, before looking at improvements, the landlord should consider whether the rating will improve through the tenant removing their fit-out or whether it is only poor because of the fit-out. 
• Landlords must obtain accurate advice on the current EPC position before taking further steps. A draft EPC can be commissioned that does not have to be lodged, and if it is suitably accurate, then the landlord can use it to decide on the next steps. 
• Landlords should not rely on recommendation reports to guide on required improvements as these are automatically generated by EPC software and may not be accurate. 

A consultation proposed a series of deadlines for privately rented non-domestic buildings between 2023 and 2030. These are that:

• By 1 April 2025 – buildings that are not exempt must present a valid EPC;
• By 1 April 2027 – all buildings must meet a minimum EPC standard of C or have a valid exemption registered;
• By 1 April 2028 – landlords must check their EPCs to help identify any properties that require further improvements; and
• By 1 April 2030 – buildings must meet a minimum EPC standard of B or have a valid exemption registered.