One of the most wide-ranging pieces of legislation to affect commercial property will soon become even more relevant, as the deadline for compliance approaches.

Just as we are all getting used to having current and compliant EPCs at the time of letting and lease renewals, from the 1st April 2023, landlords will no longer be allowed to continue with existing commercial tenancies, unless they reach a minimum EPC Rating of E or above. Therefore, come 1st April 23 any commercial property with a rating below E will be illegal and could leave the landlords subject to large fines.

Quite often those buildings falling below the E Rating only need fairly minor improvements to bring them back into compliance, but with government strategy indicating that all buildings will have to reach a minimum of Grade B by 2030, with an interim target of Grade C by 2027, landlords should start to consider a longer-term strategy for improving their buildings to meet these new standards.

To add further to the problem the government released The Heat and Buildings Strategy in Oct 2021 which requires that gas boiler sales to commercial buildings should cease by 2030/33.

This leaves landlords of some buildings with a big problem and the thorny question of who will pay for these improvements is frequently asked, especially where buildings have service charges in place to pay for common facilities such as boilers, communal maintenance, etc.

Each lease will be different in its interpretation of the repairing and the service charge clauses and not surprisingly the courts have been asked to consider this issue in a number of recent cases. The general tone of these decisions is bad news for landlords, as these works are generally viewed as improvement works and therefore outside of the service charge responsibility.

Therefore, in general terms, landlords are expected to bear the cost of the works required to bring their buildings up to a level to comply, not only with today’s compliance levels, but those moving forward into the future.

Ayers & Cruiks Commercial Management team can assist you and have connections with industry experts in this field to help you build a consolidated policy for energy management in your buildings.