With only a month to go before the new Minimum Energy Efficiency Standards (MEES) come into force, it has been reported that almost one in five commercial properties in England and Wales are below the minimum ‘E’ rating required.
Under the MEES regulations, it will be unlawful for landlords to let commercial and domestic buildings in England and Wales that do not achieve an EPC rating of E or above. According to the Nimbus Maps data, 18% of commercial properties will be unlettable if they do not improve their rating by the 1st April.
Given the financial risk to owners of commercial buildings that do not meet the new regulatory standards, it is essential that landlords gain a clear understanding of the energy efficiency of all their assets before the standards come into force.
The costs of refurbishment and upgrading, along with the likely tenant void, will need to be assessed by owners and occupiers alike. Property values may well be affected by the new regulations, although by linking minimum energy standards to the ‘Green Deal’ government is hoping it will provide a financial solution to support energy efficiency and the refurbishment of existing buildings.
Landlords cannot afford to be complacent as around 60% of today’s commercial buildings will still exist in 2050, representing around 40% to 45% of total floor space. While standards to tackle the performance of new buildings have been in place for some time, minimum standards to drive improvements in the performance of the existing stock through energy efficiency upgrades are essential going forward to tackle energy use and reduce emissions across commercial stock.
From 1 April 2018, an enforcement authority can serve a penalty notice (a fine up to £150,000, a publication placed on an open public register or both) for breach of MEES. For more information please click here for a recent article by DAC beachcroft.