Commercial Landlords

MEES require landlords of non-domestic privately rented property in England and Wales to hold an EPC of at least band E. Since 1 April 2023 this applies to all existing let non-domestic property, not just new tenancies, so a sub-standard building must either be improved or carry a valid registered exemption.

Letting or continuing to let a sub-standard non-domestic property without a registered exemption is a breach of the MEES Regulations and local authorities can impose civil penalties based on rateable value, alongside publication of the breach. In practice the commercial risk usually bites first, through failed lettings, delayed transactions and price chips.

Government policy has signalled a tightening of the non-domestic minimum standard towards EPC C by 2027 and EPC B by 2030, subject to confirmation. Prudent asset owners are planning capital works now against those dates, because the works required to move a mid-band building to B are frequently fabric and plant replacements that only make sense at lease or refurbishment events.

We assess where every asset in a portfolio sits against current and future thresholds, model the measures that would move each one up a band, and cost them so capital can be planned against lease events. Where improvement is not cost-effective or not possible, we prepare and support the relevant exemption registration on the PRS Exemptions Register.

The main non-domestic exemptions cover measures that fail the seven-year payback test, cases where consent from a tenant, lender or planning authority is refused, situations where measures would devalue the property by more than 5%, and recently acquired properties. Exemptions must be registered on the PRS Exemptions Register with supporting evidence and generally last five years.

Improve where the works also protect value, rent and lettability; register an exemption where the payback genuinely fails and the asset is heading for redevelopment or disposal. Exemptions are a five-year pause rather than a solution, so we model both routes and compare them against the likely 2027 and 2030 thresholds before recommending one.

In Scotland, owners of non-domestic buildings over 1,000m² must produce an energy performance Action Plan when selling or letting, unless the building meets 2002 building standards or better. The Action Plan identifies the building's emissions and sets out the physical improvement works required, which must then be carried out within 3.5 years or deferred by annual operational ratings.

MEES as drafted applies to England and Wales only. Scotland regulates non-domestic energy performance principally through Section 63 Action Plans and its own building standards, while Northern Ireland operates its own EPC regime under separate legislation, so a UK-wide portfolio needs three parallel compliance tracks.