When you start the process of buying a business, it’s common to feel overwhelmed by the complexities, especially when it comes to the legal details. At WSP Solicitors, we’re known...
Just how energy efficient is your commercial property?
New regulations which come into effect on 1 April 2018 require all properties to achieve a minimum standard of energy efficiency. Can you be sure that your property is compliant? As from 1 April 2018 landlords will no longer be able to grant a lease, or renew an existing lease, of commercial premises with an energy rating less than E.
A landlord who continues to let a commercial property which does not meet the minimum requirements after 1 April 2023 will be in breach of the Regulations. This includes properties where a lease is already in place and a tenant is in occupation of the property.
Whilst there are some temporary exemptions which may apply, any landlord who leases a property which does not meet the minimum requirements will be liable to enforcement action. This can include a financial penalty of up to £10,000 or 20% of the rateable value of the property (up to a maximum of £150,000) and publication in a register of the details of the breach.
The regulations do not apply to short leases of less than 6 months or long leases granted for a term of 99 years or more. However, many leases being granted now, or even existing leases, will extend beyond 1 April 2023. Does your lease adequately address these issues? Who is responsible for carrying out any energy improvement works needed? Does the landlord have a right to enter the property to carry out energy efficiency improvement works? Who is responsible for the cost of those works? Does the landlord have a right to break the lease if continuing to let the property would put the landlord in breach of the regulations? These are just a few of the potential issues which may arise. Landlords and tenants are encouraged to consider and address these issues now, well in advance of the 1 April 2023 deadline.