EPCs and MEES – what happens at lease renewal?

There is often confusion about what happens when an existing tenant renews, at least when it comes to EPCs and MEES. The important thing to bear in mind is that there are two separate bits of legislation and whilst they interact, they do have differing requirements.

When it comes to EPCs, the then-named Ministry of Housing, Communities & Local Government guidance document (the snappily titled A Guide To Energy Performance Certificates For The Construction, Sale And Let Of Non-Dwellings: Improving The Energy Efficiency Of Our Buildings, December 2017) clearly states: a lease renewal or extension is not a trigger for an EPC as “the purpose of providing an EPC during the sale or renting process is to enable potential buyers or tenants to consider the energy performance of a building as part of their investment”.

When it comes to MEES, the then-named Department for Business, Energy & Industrial Strategy guidance document (the even more snappily titled The Non-Domestic Private Rented Property Minimum Standard: Guidance for landlords and enforcement authorities on the minimum level of energy efficiency required to let non-domestic property under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, February 2017, and the MEES Regulations themselves) make it clear MEES only apply to properties that are legally required to have EPCs. There is no requirement or trigger for an EPC within the MEES regulations themselves.

 This is emphasised in this example from the BEIS Guidance document (page 21), which demonstrates the principle with regard to the 2023 ‘continuing to let’ scenario and an ongoing tenancy, but would appear to apply equally when there is a lease renewal or extension and no valid, legally required EPC on the EPC register.

SCENARIO 3

A property let on a twenty-year lease with an F rated EPC obtained in 2012: On 1 April 2023 the landlord is continuing to let the property but in this scenario will not be captured by the minimum energy efficiency provisions because the EPC expired in 2022, and there is no legal requirement on the landlord to obtain a new one at that point (because the tenancy is ongoing).

In summary, if at the point of lease renewal or extension there is no valid, legally required EPC then there is no requirement to comply with MEES at this stage.

A note of caution, however: under the EPC Action Plan and next stages of MEES, all of this may well change with a requirement to have an EPC at all times for let property looking a likely outcome. Watch this space!

Download our guide to MEES and Lease Renewals and Extensions