As a landlord in the UK commercial property market, compliance with energy performance regulations is not just a legal obligation but also a matter of strategy, says Melissa Roberts, Partner, Mayo Wynne Baxter

Understanding the workings of energy performance legislation and taking proactive steps with a view to improving your properties’ energy efficiency can enhance property values, attract tenants, and mitigate risks. In 2024, the main points that all commercial landlords navigating energy performance regulations should consider are as follows:

1 Familiarise yourself with key regulations

Make a point of knowing your obligations under the Energy Performance of Buildings (England and Wales) Regulations 2012 and the Minimum Energy Efficiency Standards (MEES). These regulations confirm your obligations in respect of the assessment and certification of energy performance for commercial buildings as well as setting minimum efficiency standards that properties must meet to be let or sold.

2 Conduct energy audits

Undertake energy audits for all your commercial properties to assess their current energy performance and to identify areas for improvement. You should then engage qualified professionals to perform comprehensive assessments, including energy usage analysis, building envelope inspections, and heating, ventilation and air conditioning (HVAC) system evaluations.

3 Obtain Energy Performance Certificates (EPCs)

Ensure that all your commercial properties have valid EPCs with acceptable energy efficiency ratings. EPCs not only provide valuable information to prospective tenants and buyers about a property’s energy performance but are also essential for compliance with your regulatory obligations.

4 Implement energy efficiency measures

Take proactive steps to improve the energy performance of your properties by implementing energy efficiency measures. This does not always have to include large scale costly changes but may include upgrading lighting systems, installing energy-efficient appliances, improving insulation, and improving HVAC systems. The benefit of this is twofold – not only will you enhance energy performance, but also reduce operating costs which will not only make your property more desirable to prospective tenants but also improve existing tenant’s satisfaction.

5 Monitor and maintain performance

By regularly monitoring and maintaining the energy performance of your properties, you will ensure ongoing compliance with regulations. Installing systems to track energy usage, conducting regular maintenance checks, and addressing issues promptly will all pay dividends here. Taking a proactive approach to maintenance should not only preserve your property’s energy efficiency rating
but also prevent costly repairs and downtime between tenants.

6 Include energy performance in leases

When drafting commercial leases, it is important to consider incorporating provisions related to energy performance. These provisions should allocate responsibilities and promote energy efficiency. Potential lease clauses can require tenants to comply with energy performance regulations, maintain energy-efficient practices, and allow access for energy audits and upgrades.

7 Explore the benefits of ‘going green’

You could consider pursuing green certification schemes such as BREEAM (Building Research Establishment Environmental Assessment Method) or LEED (Leadership in Energy and Environmental Design) to highlight your properties’ sustainability credentials. You could also explore incentive programmes and grants available for energy efficiency upgrades, renewable energy installations, and sustainable building initiatives.

8 Stay informed and evolve

Keep up to date with developments in energy performance regulations, market trends, and emerging technologies so that you can adapt your business’ strategies accordingly. As part of this process we would always advise consulting with legal and energy performance experts to stay ahead in what remains an ever changing landscape.

All businesses are now being forced to consider their own social and environmental performance in order to build a more inclusive and sustainable economy, and commercial property businesses are no different. By making energy performance and sustainability a matter of business strategy, landlords will not only meet regulatory requirements, but also distinguish their properties in the market, attract quality tenants, and enhance long-term value.

As a B-Corporation certified organisation Mayo Wynne Baxter understands the challenges faced by commercial landlords in the current market. If you are a commercial landlord granting a commercial lease and considering how to incorporate energy efficiency provisions to protect your business assets, then please contact our Commercial Property Team today who will be happy to assist you.