EPC Commercial Confusion?

Reply to the comment left by Guy Couchman at 24/02/2022 - 15:21
Why do you 'think' he meant that? He clearly stated 'fees to tenants are not legally permitted'. This is absolutely quoting the tenants fees act - which doesn't apply to commercial.

Reply to the comment left by DSR at 25/02/2022 - 19:04
In the first instance the landlord must ensure that the property has an appropriate EPC; this is not the responsibility of the tenant. What you could do, though, is an agreement to lease whereby the tenant undertakes to do the required works BEFORE the lease starts. That way at the time of the lease the EPC is compliant.

A good agent should know how to steer you through this.

Reply to the comment left by Graham Bowcock at 28/02/2022 - 09:11
Yes, some of my tenants have already switched over to LED lighting at their own expense, giving them the benefit of lower electricity bills. If additionally, they were to improve the insulation of the building, then they'd be the net beneficiary - in time. Win, win.

The question of need for an EPC on a listed building still seems ambiguous.
“Business Premises – Government Guidance“Exemptions you don’t need an Energy Performance Certificate (EPC) if you can demonstrate that the building is any of these:
o - listed or officially protected and the minimum energy performance requirements would unacceptably alter it ........”
I’ve had a quote for £1k for an expiring C L/B.
I don’t need it, nor will I act on it, nor does the tenant. Why waste a grand? The EPC will have expired before lease ends.

I have a commercial tenant who is selling their business on as a going concern. New potential tenant just wants to carry on with the existing lease as is (bar a name change etc)

I am concerned by the EPC issue going forward. Is an E now but MAY need to get to a C (if you take it as read the government do what they say they re going to do)
Dilemma is ... I know I am responsible for having the EPC carried out and therefore paying for it, but if there are things required to be carried out to get up to a C then who/how is this funded and where does the liability lie exactly?

Yes I understand I cant lease the property without reaching the C but at the mo I have no idea of costs of anything that may be needed so cant really put up the rent on the basis of 'what if'. A rent increase now might put off the buyer of the business. I know the existing tenant needs to sell the business on - the worse outlook is he just gives notice and closes the business. Then I have no tenant at all.

I could pick the cheapest cost and lowest level of work involved to get up to a C, but this may conflict with how the tenant wants to use the property, so what then?

Am I assuming a bit like the residential EPC side that a possible exemption might be that (commercial) tenant does not give permission for such works until such time as their lease comes to an end or until they gives notice?

Your starting point should be the lease. Does the tenant have the right to break or assign?

Check who is responsible under the lease for doing works - we manage commercial property and the better drafted leases (by lawyers) usually include an obligation for tenants to meet costs.

You may be worrying unnecessarily, although you are right to be prepared. Firstly get the EPC done as this will help you to plan - you will then be able to work out costs. Note, however, that costs may not translate to rent - some properties may remain unpopular with tenants no matter what EPC works you do.

Reply to the comment left by Graham Bowcock at 29/03/2023 - 14:40
6 month break notice clause for break date of Dec 2023. EPC is an E currently - expires 2030.
Property type D2 310sqm No gas to property all electric.

The tenant must pay to the Landlord on demand a fair proportion of all costs payable by the Landlord for the maintenance, repair, lighting, cleaning and renewal of all service media, structures and other items not on or in the building but used or capable of being used by the building in common with other land.

The tenant must keep the property in good and substantial repair and condition

EPC info...Changes that pay for themselves within 3 years
Recommendation Potential
impact
In some spaces, the solar gain limit defined in the NCM is exceeded, which might cause overheating. Consider
solar control measures such as the application of reflective coating or shading devices to windows.
Medium
Consider replacing T8 lamps with retrofit T5 conversion kit. Medium
Add optimum start/stop to the heating system. Medium
Some walls have uninsulated cavities - introduce cavity wall insulation. Medium
Changes that pay for themselves within 3 to 7 years
Recommendation Potential
impact
Some windows have high U-values - consider installing secondary glazing. Medium
Add local temperature control to the heating system. Medium

Recommendation Potential
impact
Add weather compensation controls to heating system. Medium
Some loft spaces are poorly insulated - install/improve insulation. Medium
Add local time control to heating system. Low
Some solid walls are poorly insulated - introduce or improve internal wall insulation. Medium
Carry out a pressure test, identify and treat identified air leakage. Enter result in EPC calculation. Medium
Some glazing is poorly insulated. Replace/improve glazing and/or frames. Medium

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Just read the exemptions part...

Third party consent refused: Where the landlord is unable to carry out works to improve the energy efficiency of the property because consent of a third party is refused. The property can be let provided the exemption is registered on the PRS Exemptions Register.

Presume that the tenant could refuse themselves? What of the joint owner of the building? If they object then is exemption possible?