Commercial landlords warned over minimum energy efficiency ratings

Commercial property landlords could be caught out by upcoming minimum energy efficiency rules.

The proposed rules will see the government raise the minimum energy efficiency rating for all properties to a C rating by 2027, with all properties having to reach a higher B energy grade by 2030.

The time before the two deadlines, known as “compliance windows”, will support landlords by allowing them time to complete improvement works and obtain the necessary Energy Performance Certificate (EPC), which must be in place to sell or let a property.

Phil Hunt, an associate at Midlands law firm mfg Solicitors, said: “Whitehall-led changes to energy efficiency rules have been on the cards for some time, and whilst the changes have not been confirmed, there is likely to be a clear seven-year timetable for landlords to work towards.

“The importance of the minimum energy efficiency rules cannot be overstated. Not only do they affect a landlord’s ability to let property, but also a seller’s ability to sell, and a borrower’s ability to borrow.

“Naturally, any buyer or lender will want to know that the rules have been complied with before they proceed with a transaction, and I am keen that landlords realise the need to be proactive and begin to put changes in place now, to avoid owning a property which they cannot sell, let or borrow against.

“My message is that landlords must take the best advice and start looking across their whole portfolio now to audit where the risks are and therefore avoid issues and what could be an unprofitable property investment.”