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Commercial landlords: Why it pays to be efficient

PUBLISHED: 16:27 13 February 2018 | UPDATED: 16:27 13 February 2018

Nick Cox, Property Litigation Partner with Willans (c) Clint Randall / www.pixelprphotography.co.uk

Nick Cox, Property Litigation Partner with Willans (c) Clint Randall / www.pixelprphotography.co.uk

Clint Randall - pixel pr phototography

Nick Cox, property litigation partner at Willans LLP solicitors, discusses the upcoming EPC rules and how these may affect commercial landlords

From April 1 this year, almost anyone seeking to let a commercial property will have to consider an additional complication, whether the property has a suitable Energy Performance Certificate (EPC).

If a non-domestic property is required to have an EPC and it is intended to be rented out, then, provided it already has an EPC with a rating of E or above, the landlord has nothing to worry about.

If the property has a lower F or G rating, then the landlord must take steps to improve its energy efficiency to a minimum rating of E. If he doesn’t, he will not be permitted to let the property.

In practice, the requirement for these improvements will mean more work for consultants and surveyors, and potentially more expense for landlords. This is not an expense that can legitimately be passed on to tenants.

However, there are some exceptions to the rules.

Buildings which are listed or situated in conservation areas may not be required to have an EPC, and if the measures required to comply with minimum standards may alter the character or appearance of the building, then again an EPC may not be legally required.

Also, if it is impossible to install the relevant improvements, either physically or legally, or if the relevant improvements would still leave the property rated at F or G, or if the effect of the relevant improvements would devalue the property, the landlord may be able to register an exemption on the PRS Exemptions Register. This exemption will last for five years, and may be renewed, but cannot be transferred.

These provisions will have a significant effect on the investment value of properties. They will also need serious consideration when renewing a lease or at the end of a lease, when questions of dilapidations arise.

For more information, contact Nick directly at nick.cox@willans.co.uk. Willans’ multi-disciplinary legal teams handle corporate, commercial, employment, litigation and property issues all day, every day helping companies large and small with complex business decisions. For responsive, clear legal advice and support, contact 01242 514000.

Visit the Willans website here.

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