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Energy warning to landlords

As many as one in five commercial properties in the UK could become unlettable unless landlords take steps to improve energy efficiency, an expert has warned.

The Energy Act 2011 provides that, from April 2018 at the latest, it will be unlawful to rent out residential properties or commercial business premises which do not reach a minimum energy efficiency standard.These standards are known as Energy Performance Certificates (EPCs), and work in a similar way to the familiar ‘rainbow’ logo on the side of certain white goods including fridges, to show how energy efficient they are on a scale of A to G.

David Hill, Commercial Property partner at Napthens solicitors, warns that landlords of the lowest rated buildings, F and G, may be unable to rent them out after April 2018 unless they take steps to improve their energy efficiency.

This accounts for as many as one in five UK commercial properties.

David Hill said: “Legislation can change, but 2018 is the latest date that this rule can come in. It is widely accepted that it will actually come into force much sooner than that. Property owners and lessees of these less efficient buildings should consider what action they should take.

“For instance, where the EPC rating is F or G, or close to these limits, an energy efficiency plan should be put in place. In very old buildings, real thought should be given to assessing the cost and benefit of making changes to improve energy efficiency and weighing these against options to sell the property before it becomes too expensive to maintain.

“Previously EPCs had very little real authority, but it is clear they are now growing teeth. New guidelines must be published soon as there are a number of inconsistencies with the current law, for instance what happens to properties that are rented now but with a lease that extends past the 2018 date.

“In the meantime, landlords should take proper professional advice to avoid serious problems in the future.”