EPCs and lease events: new lettings, renewals, sales and expiry

Which lease events need an EPC?

GOV.UK says you must have an EPC if you rent out or sell business premises, when a new building is finished, and when a building is changed to have more or fewer separate parts with new or extended fixed heating, air conditioning or ventilation. Not making one available to a prospective buyer or tenant can lead to a fine of £500 to £5,000, based on the rateable value.

A valid EPC can be reused. DCLG's guide to EPCs for non-dwellings says a certificate is valid for 10 years, or until a newer one is lodged, and the same EPC can be given to any buyer or tenant in that time. Since 9 January 2013, the asset rating must be stated in commercial adverts for a sale or letting where one is available.

New lettings

Before granting a new lease, the landlord needs a valid EPC: if the current one is less than 10 years old it can be used; if it's older, or there isn't one, a new one is needed to market and let the building. If that EPC is F or G, the building must be improved to E, or an exemption registered, before the lease is granted.

Lease renewals and extensions

Since 1 April 2018, renewing or extending a tenancy counts as letting under regulation 27. So a renewal of a unit rated F or G needs an improvement to E or a registered exemption first.

Where the tenant has a statutory right to renew under Part 2 of the Landlord and Tenant Act 1954, the guidance says the landlord can't refuse the renewal because the building is sub-standard, and a new lease granted under the 1954 Act can qualify for a temporary 6-month exemption, which must be registered. Equally, a tenant can't use the landlord's failure to meet the standard as a reason to end the lease early.

What happens if an EPC expires during a lease?

Nothing, straight away. The full landlord guidance says that once an EPC reaches 10 years and expires there's no automatic requirement to produce a new one; the next one is needed when the building is next sold, let or modified in the relevant way. Because MEES judges a building by its valid EPC, the guidance's worked examples go like this:

• Let on a 10-year lease with an F rated EPC obtained in 2015: on 1 April 2023 the EPC was still valid (until 2025), so the landlord had to comply.
• Let on a 20-year lease with an F rated EPC from 2012: on 1 April 2023 the EPC had expired (in 2022), so the landlord wasn't caught while that lease runs. A new EPC, and with it the MEES test, comes when the building is re-let to the same or a new tenant, or modified in a way that needs a new EPC.
• If the tenant in that second case sublets, the tenant becomes a landlord, needs an EPC to market the space, and must comply if it's F or G.

Of the 25,619 buildings over 1,000 m² rated C to E, 6,062 (23.7%) had an EPC that had already lapsed at the snapshot and 7,525 more were estimated to lapse before 2031: 13,587 in all (53.0%). We estimate expiry as the lodgement date plus 10 years, because the register's data has no expiry date (snapshot 30 Sep 2026).

Sales and lease events at the same time

A building needs a valid EPC to be sold. The EPC belongs to the property, not the owner, so a certificate the seller obtained stays valid for the buyer until it's 10 years old.

Exemptions don't travel with it. If a let building is sold with an exemption registered, the exemption stops being effective and the buyer must improve the building or register their own. A buyer of a let property can claim a temporary 6-month exemption from the date of purchase, which must be registered (regulation 33). If the buyer will occupy the building, the guidance says the regulations don't apply at all.

Subletting and assignment

A tenant who sublets becomes a landlord for MEES purposes and shouldn't sublet until the minimum standard is met. They'll often need the superior landlord's consent for any works, and if it's refused the third-party consent exemption may apply.

Assignment is different. Where the arrangement doesn't make the tenant a new landlord, the guidance says any duty to meet the standard stays with the original landlord. Take advice where it isn't clear which applies.

Short leases, long leases and licences

Regulation 20 leaves out tenancies granted for a fixed term of 6 months or less, unless the lease can be renewed or extended beyond 6 months or the tenant has already been in occupation for more than 12 months, and tenancies of 99 years or more. The guidance says licences and agreements for lease are unlikely to be caught.

How many industrial EPCs are lodged for lettings and sales?

Every new letting or sale needs a valid EPC, so new certificates on the register show which buildings are coming to market. In the 12 months to 30 Sep 2026, 11,172 industrial and warehouse buildings had their latest EPC lodged for a letting or a marketed sale: about 931 a month.

How do lease events fit with the 2031 proposal?

The interim response proposes EPC B from 2031 for privately rented buildings over 1,000 m² (10,764 sq ft), where cost effective, but doesn't say how it will apply to leases already running, or whether landlords will have to hold a valid EPC by a set date. The 2021 consultation had proposed two-year compliance windows with a requirement to present a valid EPC; the interim response doesn't take that up either way. Watch for the full government response.