An Energy Performance Certificate (EPC) is a detailed report about a property’s energy efficiency and carbon dioxide emissions that is produced following an Energy Assessment Survey. It rates a building’s energy efficiency from A (most efficient) to G (least efficient) and provides recommendations for improvement. Once issued, an EPC is valid for 10 years.

Penalties for non-compliance with EPC requirements carry fines of up to £150,000, so it is crucial that commercial landlords stay alert to the upcoming changes that affect their obligations.

Current requirements

The Minimum Energy Efficiency Standards (MEES) were introduced in 2018 and mean that all properties built, let or sold in England and Wales must have an EPC rating of "E" or above.

As of 1 April 2023, the MEES were extended to apply to commercial properties subject to existing commercial tenancies, whereas previously they had only applied to properties subject to new tenancies and tenancy renewals. The effect of this is to prevent any property that does not have a valid EPC rating of "E" or above from being lawfully let, unless all the relevant energy efficiency improvements for the property have been made, or an exemption applies.

Recent and upcoming changes

In an effort to make buildings more energy efficient and work towards "net-zero" targets, the government has proposed raising the minimum EPC rating for all rental properties under the MEES to "B" by 2030.

Envisaging a phased approach, the government has rolled out, or plans to roll out the following requirements:

• From April 2025, letting a commercial property falling under the MEES without a valid EPC was made unlawful. This means that landlords with expired certificates must renew them, even if no lease activity is taking place.
• By April 2027 all commercial landlords must either improve their buildings to obtain an EPC rating of "C" or register a valid exemption, or the property will not be able to be lawfully leased. Note, however, that some have reported this requirement has since been extended to April 2028.
• By April 2028, EPCs must be reviewed for any further necessary upgrades.
• From 1 April 2030, it is envisaged that the minimum EPC rating for commercial properties will be further increased to "B".

Aside from the legal consequences, failing to comply with these EPC changes carries the risk of tarnishing the future value of your property and your reputation as a landlord. Commercial landlords should therefore be proactively planning to review their existing EPCs and carry out any required upgrades as soon as possible.