Is the Property Within the MEES Rules?
The Regulations generally apply to non-domestic rented properties that are legally required to have an EPC and are let on a relevant tenancy.
Certain very short and very long leases fall outside the rules. A tenancy granted for a term not exceeding six months may be excluded, provided that it does not contain provisions extending it beyond six months and the tenant has not already occupied the property continuously for more than 12 months.
A tenancy granted for a term of 99 years or more is also outside the relevant tenancy range.
Some buildings are not legally required to have an EPC, but this must be checked carefully. A landlord should not assume that a workshop, warehouse, listed building or property intended for redevelopment is automatically exempt.
The requirement to have an EPC and the availability of a MEES exemption are separate questions. The building’s construction, use, occupation, services and the nature of the transaction all need to be considered.
If the property is empty and is not being let, MEES does not require immediate improvement solely because its EPC is below E. The problem becomes urgent when a landlord intends to grant a tenancy or where a sub-standard building is already occupied under a relevant lease.
Why the Commercial EPC Should Be Reviewed First
A non-domestic EPC considers the building fabric and its fixed services, including lighting, heating, cooling, ventilation, hot water and controls. For most existing non-domestic buildings, the calculation is completed using an approved implementation of the National Calculation Methodology, normally SBEM. More complex buildings may be assessed using an approved Dynamic Simulation Model.
Two similar-looking shops, offices or industrial units can receive different ratings. Lighting efficiency, heating controls, glazing, roof construction, air-conditioning systems and the way the building has been divided into activity zones can all affect the result.
Before instructing improvement work, the landlord should check that the EPC accurately reflects the building. Missing construction evidence, incorrect zoning or outdated information about the building services can alter the calculated rating.
A new assessment cannot simply assume that insulation, controls or efficient equipment are present without suitable evidence.
The recommendation report should then be considered alongside the building and the terms of the lease. Some improvements, such as replacing inefficient lighting or installing better controls, may be relatively straightforward.
Other measures may require tenant cooperation, superior-landlord consent or coordination with a future fit-out, lease renewal or major refurbishment.
Which Improvements Must Be Made?
Unlike the current £3,500 domestic spending cap, non-domestic MEES uses a seven-year payback test to identify relevant energy-efficiency improvements. A measure, or a package of measures, fails the test where the expected energy-cost savings over seven years are lower than the cost of purchasing and installing it.
Where an improvement meets the test, the landlord is generally expected to carry it out. Where it fails, the landlord may be able to register a seven-year payback exemption, supported by the necessary quotations and calculations.
Commercial MEES planning is therefore not simply a matter of choosing the cheapest recommendation. The landlord needs to understand which measures are cost-effective under the statutory test, how they interact with the building’s existing services and whether they will move the calculated rating to E.
In smaller commercial units, lighting and controls can sometimes make a significant difference. In larger or more complex buildings, heating, cooling, ventilation, building-management controls and fabric improvements may need to be considered together. The most expensive project is not automatically the measure that produces the greatest improvement in the EPC rating.
When Can an F or G Property Still Be Let?
A property within the Regulations can only continue to be let below E where a valid exemption has been registered. Non-domestic exemptions include the seven-year payback exemption and an all-improvements-made exemption where all relevant measures have been completed but the property remains below E.
Exemptions may also be available where essential third-party consent cannot be obtained, where recommended wall insulation would negatively affect the building or where qualifying improvements would reduce the value of the property by more than five per cent. A temporary six-month exemption can apply in specified circumstances where someone has recently become the landlord. Most exemptions last for five years. Where an exemption relates to a tenant refusing consent, it may end when the relevant tenancy ends or is assigned.
Exemptions do not normally transfer to a purchaser. A buyer acquiring a let property rated F or G must therefore establish their own compliance position.
An exemption applies only from the point at which it is registered on the PRS Exemptions Register. Keeping quotations, calculations or a surveyor’s report in the property file is not enough. The evidence must support the exemption selected, and false or misleading information can lead to a separate financial penalty.
What Penalties Could the Landlord Face?
Non-domestic MEES is enforced by Local Weights and Measures Authorities, usually through local authority trading standards functions. The enforcement authority can serve a compliance notice requiring the landlord to provide the relevant EPC, tenancy information, records of energy-efficiency improvements and other supporting evidence.
For a breach lasting less than three months, the financial penalty can be the greater of £5,000 or 10 per cent of the property’s rateable value, subject to a maximum of £50,000.
For a breach lasting three months or more, the penalty can be the greater of £10,000 or 20 per cent of the property’s rateable value, subject to a maximum of £150,000.
A financial penalty of up to £5,000 can also apply where a landlord supplies false or misleading information or fails to comply with a compliance notice. The authority may also publish details of the non-compliance. That can affect the landlord’s reputation, future transactions and relationships with lenders, tenants and professional advisers.
What Is Changing After 2026?
As of July 2026, EPC E remains the legal minimum for non-domestic rented properties within the scope of the Regulations.
In June 2026, the Government confirmed a proposed targeted future approach. Privately rented buildings with a floor area of more than 1,000 square metres are intended to reach EPC B from 2031 where this is cost-effective. Buildings below the 1,000-square-metre threshold are intended to remain subject to the existing EPC E minimum. The previously proposed interim EPC C milestone for 2027 will not be taken forward.
These proposed changes still require secondary legislation before they take effect. Commercial landlords must therefore comply with the existing EPC E standard now. However, owners of larger buildings should begin considering the potential route to B as part of lease events, capital expenditure plans and future refurbishment programmes.
Conclusion
A commercial property below EPC E cannot normally be let simply because a tenant is willing to occupy it or because the lease predates April 2023.
The landlord must first establish whether the building and tenancy are within scope. They must then complete the relevant cost-effective improvements or register a valid exemption. A careful non-domestic EPC review can prevent money being spent on measures that do not deliver the expected result. It can also identify missing evidence, inaccurate building information and opportunities to coordinate improvements with a lease renewal, fit-out or planned refurbishment.
EPC Pro provides non-domestic EPC assessments and practical guidance for commercial landlords, agents and property owners who need to understand a low rating, plan improvement work or demonstrate MEES compliance.
