As a commercial landlord of one or more properties, you have to be sure that you’re not paying too much for your energy bills. You can arrange certain responsibilities with your tenant, but you need to make sure that you’re complying with regulations about energy usage and performance. This makes it easier to find cheaper business energy deals, and ultimately pass the saving onto your tenant.
If you’re a commercial landlord, you’ll know that you’re responsible for a wide range of things. Your lease agreement should state clearly what responsibilities you can leave in the hands of your tenant.
However, commercial landlords are always responsible for the bulk of infrastructural and health and safety issues, such as:
Providing the piping and wiring to service the house with electricity, gas and water is always up to the landlord. This also goes for any gas or electrical appliances you supply as part of the lease, unless stated otherwise in the agreement.
Any appliances, fixtures or fittings provided by you the landlord must be professionally deemed safe for use prior to the tenant moving in. Anything your tenant adds after the move-in date is their responsibility.
Mostly, it’s the tenant who is responsible for managing the fire safety of a building. However, this is not the case with all commercial rental properties, so you must make sure your lease agreement makes this crystal clear.
You must always check for asbestos in the building before allowing tenants to move in. Sometimes it’s safer not to remove it, but this must be assessed by a professional.
Since the Energy Act was introduced in 2011, all commercial property owners have been required to get an Energy Performance Certificate, or EPC. This is an assessment which rates the energy efficiency of a building, rated from A – G, where A is the best and G is the worst.
In April 2018, it was mandated that all new leases and renewals, including sublets, had to have an EPC rating of E or higher.
The government is committed to reducing CO2 emissions in the UK by 80% by 2050, and so from 1st April 2023 every single lease (regardless of age) will require an above E rating. By 2025, rental properties will need at least a D, and by 2030 it will be C. It’s recommended you see to this as soon as possible.
Any failure to comply with the regulations will result in your being prohibited from renting the property to tenants until sufficient improvements have been made.
Landlords also face fines of up to £100,000; this penalty will differ depending on how long the landlord has ignored the problem as well as the value of the property itself. The details of the case will also be published, making it difficult to get more business.
The Energy Act regulations apply only to lets of between six months and 99 years. Therefore, holiday lets are exempt.
In cases in which energy efficiency updates would devalue the resale value of the property, the landlord may also be exempt from the regulations. Once the exemption has been registered, it is valid for five years.
If you’ve been notified that your property fails EPC requirements, you have six months to make the necessary improvements. Sometimes you will be granted an extension.
Whether you’re buying a new property, or looking to switch providers on a current one, it’s always good to search around for the best deals to make sure you’re not overpaying. Every building has different requirements, so if you own multiple properties it might be more cost-efficient to have different deals on each.
Take a look at our handy guide on business energy deals, so we can find the right one to suit your needs.