Commercial EPC – do I need a new one?

Commercial EPC – do I need a new one?

0:05 AM, 13th June 2023, About 9 months ago 8

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Hello, I have a commercial EPC rated as a ‘B’ that expires in September. A new tenant has just taken over a new lease on a fixed term 2 year contract and has a copy of the current EPC.

Do I need to have another new EPC done in September or do I only need one before letting again (a new lease with her or a new lease completely with another tenant) in June 2025?

Thanks,

Reluctant Landlord


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Comments

Dennis Forrest

15:00 PM, 13th June 2023, About 9 months ago

Blow the expense! Lash out £50 and get a new one and forget it for 10 years

Guy Couchman

16:41 PM, 13th June 2023, About 9 months ago

As of April this year all commercial properties must have an EPC in place if they are rented or let out. This is irrespective of the length of lease. i.e. prior to April you could have had a tenant on a 20 year lease say taken out in 2005 and you would have been fine but that all changed April this year. As you are no doubt aware it should also be an E rating or better.
Also be aware that the way commercial properties are assessed both in terms of assessment methodologies and the software calculations has changed significantly, especially since June last year. The Commercial EPC is far more an environmental or CO2 emissions rating unlike domestic which is still cost savings based. So those properties heated by electric system are better than those with gas heating system even though it may cost you more to heat the building. The theory is they say that a third of our electric is generated by zero or lower emission products such as nuclear, wind, solar etc. so that has now been reflected in the software calculations to generate the EPC rewarding those that use electric than those that use fossil fuels. So your EPC rating may well be different, I'm not saying it will but just don't be surprised if it does.

Reluctant Landlord

8:29 AM, 14th June 2023, About 9 months ago

Reply to the comment left by Dennis Forrest at 13/06/2023 - 15:00
they are more than £50 and anyway as the the OP says - is one actually required?

I would think a new one is not needed until its let again. Same with residential if an EPC expires during a tenancy? You don't need a new one until just before a new tenant/contract begins. Or am I wrong?

Neilt

11:04 AM, 17th June 2023, About 9 months ago

If mine expires during a letting period, I don't renew until the lease is due to expire. I've never had any problems. My tenants are simply happy to be there, paying the very favourable rent that I charge them.

Guy Couchman

11:58 AM, 19th June 2023, About 9 months ago

Reply to the comment left by Neilt at 17/06/2023 - 11:04
Up until April this year yes that was the case however now new legislation has kicked in which states that all property that is let or rented must have an EPC in place (and be an E or better with some exceptions) - irrespective of length of lease or EPC ending mid lease.

LL Minion

18:44 PM, 19th June 2023, About 9 months ago

Reply to the comment left by Guy Couchman at 19/06/2023 - 11:58
so if a commercial EPC expires during a fixed term lease then does the LL have to get a new one or can he do it when the current lease expiry and before a new tenant moves in?

I have one expiring in Jan 2024 and tenant fixed term till Dec 2024.

I thought I could just wait till Dec 2024 and get one done then. Mine is currently a C and will probably stay the same but certainly not drop below the legal min of E

Guy Couchman

12:57 PM, 20th June 2023, About 9 months ago

Reply to the comment left by LL Minion at 19/06/2023 - 18:44Yes, in my advice you do need one.
From 1 April 2023, the regulations tightened and it became unlawful for a landlord to "continue to let" a "sub-standard" property. Commercial properties which have an EPC rating below an E are deemed "sub-standard"
I have put the government link below:
https://www.gov.uk/guidance/non-domestic-private-rented-property-minimum-energy-efficiency-standard-landlord-guidance
There is then a further link to a more detailed document in the Government blurb.
Much like many of the EPC regulations there are things which are not exactly clear i.e. EPC's for listed buildings, this is sort of similar in that it does not specifically mention your example. However by implication that you do not have a valid EPC means that you cannot demonstrate that you are continuing to let a property with an E rating or above.
The intent of the MEES regulations brought in for April are to stop this and those with long tenancy agreements avoiding having an EPC on properties for potentially many many years.
You would have a very difficult time arguing in a court of law justifying you are continuing to let with an EPC of an E or above and also arguing against the intent of the law.
Hope this all makes sense and I would get an EPC done probably a month before expiry in case it has moved significantly but I doubt it would have moved that far that it is now below an E. I have known and done EPC's which have got worse by 2 ratings due to the changes made in software and assessment. Some have got better by 2.
Regards.

LL Minion

15:30 PM, 20th June 2023, About 9 months ago

Reply to the comment left by Guy Couchman at 20/06/2023 - 12:57
actually it is a listed property so does that mean I just need to apply for an exemption on that basis alone, rather than have to bother with a new EPC?

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