NON-DOMESTIC RENTED PROPERTIES EPC REGULATIONS

Changes to the Energy Act 2011 provide for powers to ensure that from April 2018, it will be unlawful to rent out business premises that do not reach a minimum energy efficiency standard. Energy Performance Certificates (EPC) rate how energy efficient your building is; using grades ‘A’ to ‘G’ (with ‘A’ being the most efficient). The regulations will require landlords of non-domestic buildings to have secured an EPC certificate with an E rating or higher in order to issue a new lease for a property. This will come into force on 1st April 2018. The additional requirement to secure an EPC certificate for properties with existing leases will come into force from 1st April 2023.

A summary of the key points can be seen below:

EPC Regulations – Non Domestic
Key points
Scope Non-domestic private rented sector in England and Wales
Minimum Standard E Rating on EPC
Application 1st April 2018 – granting of new lease to new or existing tenant
1st April 2023 – All privately rented properties in the scope of the regulations
Restrictions on Improvements Not cost effective on 7 year payback
Cannot gain consent for works from tenant, lender or superior landlord
Expert states that measure will reduce property value by 5% or more
Wall insulation will damage the property
Enforcement Local authority
Exemptions Exemptions to be recorded on register
PENALTIES
Providing misleading information Financial penalty not exceeding £5,000 and publication of non-compliance
Renting out a non-compliant property for less than 3 months 10% of rateable value with a minimum penalty of £5,000 and a maximum penalty of £50,000 and publication of non-compliance
Renting out a non-compliant property for more than 3 months 20% of rateable value with a minimum penalty of £10,000 and a maximum penalty of £150,000 and publication of non-compliance

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