MEES 2023: Don’t fall short
Landlords will be familiar with the current Minimum Energy Efficiency Standards (MEES) that require landlords granting a new lease of commercial premises to hold an Energy Performance Certificate (EPC) with a rating of E or above (or register a valid exemption).
This requirement will be extended on 1 April 2023 to include all existing leases of commercial premises. By way of example, a landlord that currently lets commercial premises under a 10 year lease granted in 2016 with an EPC rating of G will need to carry out sufficient energy efficiency works to improve the EPC to E or above (or register a valid exemption) before 1 April 2023.
Compliance is not necessarily a quick process. Landlords should be taking steps now, if not already in hand, to identify any properties that fall below the April 2023 standard and action appropriate works where required to improve energy efficiency (or register a valid exemption). Whilst landlords will want to focus on the April 2023 date, it is likely that the minimum standard will rise in the near future with current government proposals for all commercial properties to have an EPC rating of C or higher by April 2027 rising to B or higher by 2030.
MEES should not be ignored. Whilst non-compliance with MEES does not invalidate the subject lease, and tenants will be required to continue to pay rent, non-compliance may result in a fine for the landlord of up to £150,000 per offence as well as reputational damage as a result of publication penalties.