- 08 February 2021
- Commercial Real Estate
In short a EPC is not required on renewal, the non-domestic EPC guidance makes that clear. As the guide published by the Ministry for Housing, Communities and Local Government’s (MHCLG’s) named “A guide to energy performance certificates for the construction, sale and let of non dwellings: Improving the energy efficiency of our buildings” (December 2017) states a lease renewal or extension is not a trigger for an EPC as the purpose of it is to “enable potential buyers or tenants to consider the energy performance of a building as part of their investment”.
We will discuss the purpose and differences between the MEES Regulations and EPC Regulations below.
EPC Regulations 2007
The 2007 Regulations require an EPC on the grant of a lease. The guidance further states that the purpose of providing it is for a prospective tenant to consider the energy performance of the property.
It is therefore reasonable to conclude that a “prospective tenant” does not include a person who is already a tenant. This makes sense in the context of the regime, as the renewing tenant should already know about the building’s energy performance of the property. It would serve no real purpose in those circumstances and having to provide one would be a waste of time and money.
However, the MEES Regulations provide information only when there is a valid EPC currently in place as a result of the EPC regulations applying.
MEES Regulations on non-domestic dwellings
The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 established a minimum level of energy efficiency (MEES Regulations) for privately rented property in England and Wales. The Mees Regulations came into force on 1 April 2018.
It states that the landlord will only be required to obtain a new EPC if they intend to re-let the property (to the current tenant, or to a new tenant) once the current lease expires, or if they (or their tenant) modify the property in a manner which would require a new one. So for non-domestic properties the guidance is clear and an EPC is required on the renewal of a lease, if there was a valid EPC previously. However, oddly the MEES Regulations for domestic dwellings differ.
MEES Regulations on domestic dwellings (March 2019 version)
The regulations state that; the landlord will only be required to obtain a new EPC (which will trigger a need to comply with the minimum energy efficiency provisions) if they intend to remarket the property for let once the current tenancy expires, or if they (or their tenant) modify the property in a manner which would require a new one to be obtained. It is not exactly clear on how we are to interpret this, although it seems likely that a landlord would not remarket the property for let if a new lease were being granted to the current tenant.
It seems odd that the Department of Business Energy & Industrial Strategy would wish to distinguish between domestic and non-domestic property on the question of whether it is needed on a lease renewal, or that such a difference would be intended.
A EPC is not required on renewal, the non-domestic EPC guidance makes that clear
EPCs and COVID-19
In April 2020 the Government released clear guidance on obtaining a valid EPC during the pandemic. Where it is possible to conduct an assessment safely, and complying with NHS guidance then assessments can be carried out. If this is not possible, than you should seek to do this when it is again safe to do so. However, it is important to note that obtaining one is still a legal requirement and so if all reasonable efforts have not been made to obtain a valid one then action could be taken by enforcement authorities in line with the EPB Regulations.
Should you have any queries about EPCs then please speak to our Commercial Real Estate team.
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.
About this article
SubjectDo I need an EPC for a renewal lease?
ExpertiseCommercial Real Estate
Published08 February 2021
Read, listen and watch our latest insights
- 22 September 2023
Talking Employment Law: New family friendly rights
In this first podcast in the ‘Talking Employment Law’ series, Lucy Densham Brown and Rebecca Dowle, members of the employment team summarise some of the big new family-friendly Bills that are working their way through parliament.
- 20 September 2023
- Commercial Real Estate
Commercial buyers beware of residential Stamp Duty Land Tax
This article discusses a recent case in which a property buyer calculated the Stamp Duty Land Tax due on the purchase at a lower rate, due to the mixed-use purpose of the property.
- 19 September 2023
- Privacy and Data Protection
Organisations’ use of social media: Data protection
Social media applications (or commonly known as ‘apps’) are being developed all the time and we are constantly being introduced to new social media platforms, some of which take almost no time to gain huge popularity.
- 14 September 2023
Entrepreneurial Dreams: What is the Innovator Founder Visa?
In an era defined by innovation and entrepreneurship, the United Kingdom has made a substantial effort towards fostering its reputation as a global hub for start-ups and innovators. The introduction of the UK’s ‘Innovator Founder’ route has marked a pivotal moment in the country’s immigration policy.
- 11 September 2023
- Corporate and M&A
Changes to the tax treatment of Employee Ownership Trusts
The government published a consultation on 18 July 2023 seeking the public’s views on its proposals to reform the tax treatment of Employee Ownership Trusts and Employee Benefit Trusts. Parties are invited to express their opinions via email via the government website until the consultation closes on 25 September 2023.