The Enforcement of Minimum Energy Efficiency Standards: what does it mean for Commercial Landlords?

The recent judgement in the case of John Anthony Turnbridge v The London Borough of Islington [2024] UKFTT 829 (GRC) highlights the need for landlords to review their portfolios to ensure properties are compliant with the EPC requirements under the Minimum Energy Efficient Standards (MEES). 

Summary of the case

• Mr Turnbridge was the owner of a commercial property in the London Borough of Islington.
• The property was let as a shop and on 12 November 2014, it was assessed to have a G rating. When the MEES Regulations were brought into effect in 2018, commercial properties could no longer be let with a rating of F or G, but as this property was already let at that time, the Regulations did not apply.
• However, on 1 April 2023, MEES regulations changed so that landlords could no longer continue to let commercial properties with an EPC rating of F or G.
• On 6 December 2023, Trading Standards requested a copy of the most recent EPC and lease/ tenancy agreement. The landlord quickly acted, obtaining a new EPC which was issued on 31 January 2024, and which had a rating of D. The landlord therefore became compliant with MEES again at this stage.
• Trading Standards proceeded to issue a penalty notice for non-compliance as the property had been let with a sub-standard EPC of G from 1 April 2023 to 31 January 2024. 

Outcome & Penalty

Mr Tunbridge appealed to the First Tier Tribunal against the penalty notice, but the appeal was dismissed and the financial penalty of £500 remained. 

Advice & Implications for Landlords

1. Strict Enforcement of MEES: Landlords MUST ensure that rental properties meet the required EPC ratings and that EPCs are not allowed to lapse. 
2. Potential Penalties: Non-compliance with MEES can result in significant penalties, including fines and restrictions on renting out the property. Although in the case of John Anthony Turnbridge v The London Borough of Islington [2024] the penalty was “only” £500, it is important to stress that the fines can be much higher for commercial properties of up to £5,000 or 10% of rate-able value (whichever is greater, capped at £50,000 for a breach for a period of less than 3 months) or up to £150,000 for breaches for a period longer than 3 months. 
3. Timely Action and Legal Advice: Landlords concerned about MEES should seek legal advice at the earliest opportunity to ensure they are fully informed about their obligations. Timely action can address non-compliance, assisting in mitigation penalties and costly legal disputes.

The implications for landlords 

It is crucial to keep up to date with this ever-evolving area of law and seek legal advice where things are not clear. The government is currently consulting on changing the way EPCs are calculated; and on requirements for domestic property EPC ratings to meet a minimum requirement of C by 2030. 

This case is an important reminder to landlords of the importance of properties within their portfolios being up to the minimum standards and for Energy Performance Certificates to be kept up to date. 

If you have any questions or queries relating to commercial letting or believe your property might be affected by the MEES regulations, please contact our Commercial Property team for advice. This outcome reaffirms the importance of MEES regulations in driving improvements in the energy efficiency of rented properties.