Time is ticking

Time is ticking fast until the impact of the 2011 Energy Act comes into force on the Minimum Energy Efficiency Standards (MEES) and we wanted to remind those it affects as to what this entails.

By Brent Forbes, director, Petty Chartered Surveyors

To re-cap, regulations for MEES are now in place and there is a risk that from those dates it would be unlawful to let commercial property that has sub-standard Energy Performance Certificates (EPC’s) ratings of F or G. The regulations already have the potential to impact on value and require careful consideration by sellers, buyers and funders at an early stage in any transaction now and moving forward. With an estimated 16 per cent of England and Wales’ 1.3 million non domestic stock rated F and G, EPC specialists put the cost at refurbishing these buildings at around £30bn.

In summary buyers would be unwise to ignore MEES in an acquisition and a Landlord considering a disposal should consider how he needs to prepare for 2018/2023. It would be wise to audit and 'de-risk' their property at an early date and some improvements to either Freehold or Leasehold properties may be required. The seller having to provide an EPC is well established and purchasers are advised to pay more attention to their rating. It may be that negotiation is required to bring the property up to a safe rating so the issue is not a concern in the future. The acquisition of commercial tenanted property also involves careful consideration of existing lease terms to establish who is responsible for any upgrading if the property is considered to be sub-standard. Funders are also cautious about the extent that MEES might impact on the purchasers income stream so whichever side of the fence you are sat on, this is something that should be top of the agenda now.