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F and G rated industrial units: what's unlawful today, and your options

Updated . Register figures: snapshot 30 Sep 2026.

Letting an industrial unit or warehouse in England and Wales whose valid EPC is rated F or G breaches MEES unless an exemption is registered, and since 1 April 2023 that includes lettings that started before the rules. Selling it, occupying it yourself or leaving it empty isn't a breach. The options are to improve it to E, register an exemption that genuinely applies, or stop letting it.

What's unlawful today for an F or G rated unit?

Under regulation 27, a landlord of a "sub-standard" non-domestic property must not let it. Sub-standard means it has a valid EPC rated below E. "Let" covers granting a new tenancy, extending or renewing one (since 1 April 2018), and continuing to let under an existing tenancy (since 1 April 2023).

So the breach needs all of these: the building is let on a tenancy of more than 6 months and less than 99 years; it's legally required to have an EPC; its valid EPC is F or G; and no exemption or exception is registered.

What isn't a breach?

  • Selling it. A building needs a valid EPC to be sold, but MEES is about letting. The full guidance says that if it's sold to an owner-occupier, the regulations don't apply at all.
  • Occupying it yourself, or leaving it empty with no plan to let it.
  • Letting it where it doesn't legally need an EPC, for example an industrial building with low energy demand where the air isn't fully heated or cooled.
  • Continuing a lease where the only EPC has expired. The guidance's example: a building let on a 20-year lease with an F rated EPC from 2012 isn't caught in 2023, because the EPC expired in 2022 and there's no duty to replace it while the tenancy runs. A new EPC is needed when it's next let, sold or modified. See EPCs and lease events.
  • Lettings excluded by regulation 20: fixed terms of 6 months or less (with exceptions) and 99 years or more.

What are the penalties?

Local weights and measures authorities enforce MEES. They can serve a compliance notice asking for the EPC, the lease and other documents up to 12 months after a suspected breach, then a penalty notice if they're satisfied there's been one. The landlord can ask for a review and then appeal to the First-tier Tribunal.

Penalties for letting non-domestic property in breach of MEES (SI 2015/962, regulation 41)
BreachFinancial penalty, at most
Let in breach for less than 3 months when the penalty notice is servedThe greater of £5,000 or 10% of the rateable value, capped at £50,000
Let in breach for 3 months or moreThe greater of £10,000 or 20% of the rateable value, capped at £150,000
False or misleading information on the PRS Exemptions Register, or not complying with a compliance notice£5,000
Each breach also carries the publication penalty. Rateable value means the value on the local non-domestic rating list when the penalty notice is served. The publication penalty puts the landlord's name (unless an individual), the breach, the property's address and the penalty on the PRS Exemptions Register for at least 12 months (regulation 39).

On a large industrial building the rateable value can matter: 10% or 20% of it can exceed the £5,000 or £10,000 starting points, up to the caps.

How many industrial buildings are rated F or G?

1,037 industrial and warehouse buildings over 1,000 m² (10,764 sq ft) in England and Wales have a latest EPC rated F or G: 440 rated F and 597 rated G, with 3.57 million m² (38.4 million sq ft) of floorspace between them (EPC register, snapshot 30 Sep 2026). Counting buildings of every size, including workshops and depots, 5,487 are rated F or G.

Of the 1,037 over 1,000 m², 551 (53.1%) had an EPC that had already lapsed at the snapshot, and for 275 (26.5%) the latest EPC was lodged for a letting. The register can't say whether a building is let today, has been improved since, or has an exemption registered, so these aren't counts of breaches.

Swipe the table sideways for all 7 columns.

Industrial and warehouse buildings over 1,000 m² by region, most floorspace rated C to E first (snapshot 30 Sep 2026)
RegionBuildings over 1,000 m²Buildings rated C to EC to E area (m²)C to E area (sq ft)Buildings rated F or GShare below B
North West5,3133,67414,878,125160,146,80516372.2%
West Midlands5,3083,68713,840,829148,981,44317172.7%
East Midlands4,0272,74012,092,961130,167,54912471.1%
Yorkshire and The Humber4,3123,07412,077,289129,998,85712874.3%
South East5,1193,1539,439,390101,604,7486662.9%
East of England4,2172,6938,647,37593,079,57012066.7%
South West3,2522,1767,013,02275,487,5419569.8%
London2,9641,8736,247,61967,248,8115365.0%
Wales1,7381,2955,191,18455,877,4405477.6%
North East1,7101,2134,439,77647,789,3516374.6%
Regions from the ONS local authority to region lookup (December 2024); Welsh authorities are grouped as Wales. Buildings whose EPC records no local authority are left out of this table.

Swipe the table sideways for all 5 columns.

The 10 local authorities with the most industrial and warehouse buildings over 1,000 m² rated F or G (snapshot 30 Sep 2026)
Local authorityRegionBuildings rated F or GF or G area (m²)F or G area (sq ft)
BirminghamWest Midlands46131,4671,415,099
WiltshireSouth West2181,264874,718
BroadlandEast of England1833,254357,943
LeedsYorkshire and The Humber1741,185443,312
BradfordYorkshire and The Humber1544,081474,484
BrecklandEast of England1529,749320,216
SandwellWest Midlands1457,622620,238
County DurhamNorth East1449,776535,784
WolverhamptonWest Midlands1443,915472,697
KirkleesYorkshire and The Humber1442,777460,448
Ties in the count are ordered by floor area. A rating of F or G is only a breach if the building is let, needs an EPC and has no registered exemption.

What are the options for an F or G rated unit?

  • Improve it to E or better. Start with the recommendation report on the EPC, then commission a new EPC once the work is done so the register shows the new rating. See how to improve an industrial unit's EPC.
  • Register an exemption, if one genuinely applies: the 7-year payback test, all improvements made, wall insulation, third-party consent, devaluation or the temporary new-landlord exemption. See MEES exemptions.
  • Check which EPC is the relevant one. On a multi-let building, the relevant EPC is the one for the space being let, if there is one. See multi-let industrial estates.
  • Stop letting it, occupy it or sell it. None of these breaches MEES.

The full guidance also notes that EPC methods are updated from time to time, so a building's band can change on a new assessment without any work being done. It suggests landlords get advice on the rating a new EPC would give before deciding what to do.

Buying an F or G rated industrial unit

An exemption doesn't pass to a buyer. If you buy a building that's let, you have 6 months from the purchase to improve it to E or register another exemption, and you must register that temporary exemption to rely on it (regulation 33). Check the EPC, any exemption the seller registered and when it ends, and the lease terms on who pays for improvements, before you exchange.

Check a building, freeAny industrial or warehouse EPC in England and Wales. No account needed.

Questions people ask

Can I renew the lease on an F rated industrial unit?

Only if the unit is improved to E or an exemption is registered: a renewal or extension counts as letting. Where the tenant has a right to a new lease under Part 2 of the Landlord and Tenant Act 1954, the landlord can't refuse it because the unit is sub-standard, and may qualify for a temporary 6-month exemption from the new lease.

Can my tenant end the lease because the unit is rated F?

No. The landlord guidance says tenants may not use a landlord's failure to meet the standard as a reason to end their lease early.

Is it illegal to sell a G rated warehouse?

No. MEES applies to letting. The building needs a valid EPC to be sold, and a buyer who lets it will need to bring it to E or register an exemption.

How big is the fine for letting an F rated building?

Up to the greater of £5,000 or 10% of the rateable value (capped at £50,000) if the breach has lasted less than 3 months, or up to the greater of £10,000 or 20% (capped at £150,000) for 3 months or more, plus publication of the breach.

Does an expired EPC mean the building is no longer F rated?

For MEES, the test uses a valid EPC. If the only EPC has expired during a lease, there's no duty to get a new one until the next sale, letting or qualifying modification. The new EPC then decides whether the building is sub-standard.

Sources

  1. DESNZ: Non-domestic private rented property: minimum energy efficiency standard, landlord guidance (GOV.UK, updated 5 May 2026)
  2. The Non-Domestic Private Rented Property Minimum Standard: guidance for landlords and enforcement authorities (PDF, GOV.UK)
  3. SI 2015/962, regulation 20: which non-domestic properties are covered
  4. SI 2015/962, regulation 27: prohibition on letting sub-standard property
  5. SI 2015/962, regulation 33: temporary exemption for a new landlord
  6. SI 2015/962, regulation 41: penalties for non-domestic property
  7. GOV.UK: Energy Performance Certificates for your business premises

Register figures come from the government's EPC register for England and Wales, published under the Open Government Licence. How we got these figures.

This guide summarises the rules to help you find your way. It isn't legal advice: check the current guidance on GOV.UK, or take advice, before acting on it.

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