Law briefing

Abstract

Purpose – This legal update examines the implications for commercial landlords of regulations required to be made under Energy Act 2011, and to come into force by 1 April 2018. Under those regulations, a landlord “may not let” commercial premises falling below a specified energy performance rating (likely to be E). The sanction of market deprivation arguably represents a significant shift in the balance between incentive and compulsion as the key policy tool adopted by the UK Government in seeking to improve the energy performance of commercial buildings. The paper aims to discuss these issues. Design/methodology/approach – The paper sets out and reflects a practitioner's concerns relating to the proposed new sanction of market deprivation. It identifies and highlights practical difficulties likely to be encountered when considering the interaction of the proposed regulations with existing statute (e.g. Landlord and Tenant Act 1954) and contractual provisions such as tenant break clauses. Findings – The prospect of being unable to let commercial premises that fall below a specified energy efficiency rating must focus landlord attention on rights to enter to carry out improvement works. The paper identifies a potentially significant trap for landlords in the model green lease clauses issued by the Better Buildings Partnership where tenant consent is required. Research limitations/implications – The paper does not reflect extensive or exhaustive academic research. Consistently with its purpose a legal update, it identifies key issues likely to be encountered by practitioners. Practical implications – The principal practical implication is the need for landlords and their professional advisors to consider as part of any current lease negotiations the need to secure rights of entry for landlords to carry out improvement works where premises are at risk of falling below the energy performance rating likely to be specified in regulations to be made under Energy Act 2011, s 49. Originality/value – The paper reflects a practitioner's views, developed through client matters and also through designing and delivering professional training sessions, on the likely implications of the requirement for regulations under Energy Act 2011.