By Agata Marosz, Solicitor, Penman Sedgwick LLP
If you are looking to take a new commercial lease, are in the process of a lease renewal or you occupy a commercial property, check whether your landlord has complied with the MEES Regulations.
As mentioned in our last column of 2022, from 1 April 2023 landlords are unable to continue to let commercial properties that have an Energy Performance Certificate (EPC) with a rating of F or G, or grant a new lease of a sub-standard property. Landlords who fail to comply with the regulations or continue to let commercial properties that have an EPC rating lower than E without registering an exemption may face fines and legal actions.
What should tenants do?
During commercial lease negotiations:
- request an up-to-date EPC certificate to check that the rating is compliant, and if it is not compliant seek confirmation from the landlord that they have registered an exemption and ask for proof of exemption
- speak to your solicitor about the EPC/MEES related provisions in the lease; for example, is there a right for the landlord to enter the property to deal with any works required to comply with MEES, and is there any provision seeking to pass on to you the costs of making energy efficiency improvements?
Commercial property currently occupied by tenant:
- you must still observe and perform the obligations in the lease; non-compliance with MEES by the landlord does not give rise to a right for either party to terminate the lease and the landlord cannot require you to vacate
- look for provisions in the current lease allowing the landlord to enter the property to carry out improvement works; as the regulations do not give an automatic right to landlords to do so; you may be asked by your landlord to consent to such works
Does the length of the lease term matter?
Yes. If you have a tenancy not exceeding a term of 6 months, the MEES Regulations will not apply unless:
- you have the ability to renew the lease or extend the lease beyond 6 months; or
- you have been in occupation for a period longer than 12 months.
The MEES Regulations will also not apply to a commercial tenancy for a term longer than 99 years.
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