BLB’s Head of Commercial Property, Caroline Entwistle, considers whether and when listed commercial property requires an Energy Performance Certificate.
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Recently, we reported on important changes to the MEES regulations for commercial property that came into force on 1 April 2023.
The MEES regulations require properties to meet specific minimum energy efficiency standards before sale or letting. They form part of the government’s plan to achieve net zero emissions by 2050.
An Energy Performance Certificate (EPC) rates a property’s energy efficiency from A (the most efficient) to G. Before 1 April 2023, MEES required landlords of commercial premises granting a new lease to hold an EPC rating of E or above unless an exemption applied. Since 1 April 2023, this requirement applies to new and existing leases – again, unless an exemption applies.
There has been a tendency for commercial landlords to assume that listed buildings do not require an EPC. But the exemption is not that black and white. Instead, the regulations state that listed buildings are exempt from the requirement to obtain an EPC “insofar as compliance with certain minimum energy performance requirements would unacceptably alter their character or appearance“. It may be subtle, but it’s a crucial difference.
Let’s take an example. Double (or even triple) glazed windows can significantly affect a property’s energy efficiency. But as most listed buildings predate the routine installation of double glazing, many retain their original single-pane windows. In such cases, installing double glazing is highly likely to “unacceptably alter” the character of the property if the windows or façade are listed features resulting in the property’s exemption from the EPC requirements.
But in such a case, taking steps such as installing loft insulation, draught-proofing doors, or replacing the internal lighting with more energy-efficient LEDs will not affect the windows or façade. So, the property’s “character or appearance” is not unacceptably altered and is not exempt for EPC purposes.
Two part test
Therefore, there are two parts to the test as to whether a listed building is exempt:
- What are the recommended energy efficiency improvement works for the property?
- Would implementing those recommendations unacceptably alter the character or appearance of the property? This will involve inspecting the property listing to ascertain the building’s unique listed characteristics.
Of course, it’s somewhat ironic that an EPC survey is almost certainly required to determine whether an EPC survey is required!
It’s also worth noting that it’s not entirely clear what constitutes “unacceptably altering” the listed features and who is the ultimate arbiter of that question. Is it English Heritage, the local planning department, the EPC surveyor, or even the property owner?
The best practice is always to discuss with the local authority’s conservation officer whether the recommended energy efficiency improvements require listed building consent. If so, is consent likely to be refused? If consent is not required, or is likely to be granted, then assume you need an EPC.