Commercial MEES: EPC E Is the Law, EPC B Is a Proposal

Most commentary on commercial minimum energy efficiency standards still says EPC C by 2027 and EPC B by 2030. Both are now wrong. The interim government response of 18 June 2026 dropped the 2027 milestone and moved the EPC B target to 2031, applying it only to buildings over 1,000 square metres.

None of it is law yet. The law has not changed since 2023. This guide separates the three.

What is actually in force

The governing instrument is the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, which establish a minimum level of energy efficiency for rented property in England and Wales.

Two dates matter. Since 1 April 2018, landlords of non-domestic rented properties have only been permitted to grant a new tenancy, or to extend or renew an existing tenancy, if the property has at least an EPC E rating. Then, from 1 April 2023, the requirement to hold at least an EPC E — absent a registered exemption — applies to all privately rented non-domestic properties, even where there has been no change in tenancy.

That second step is the one still catching landlords. A property let on a long lease granted in 2015 and never touched since is within scope, and has been since April 2023.

Exemptions must be registered first

This is the procedural trap. The guidance is explicit that where an exemption applies, "the exemption must be registered by the landlord (or an agent for the landlord) before it can be relied on."

An unregistered exemption is not an exemption. Most exemptions last five years; the "recently became a landlord" exemption lasts six months. And the register is public: members of the public can search the PRS Exemptions Register for details of exempt properties and penalties issued to non-compliant landlords.

Two practical consequences for a transaction. On acquisition, the register is a free due diligence source on the seller's compliance history. On a letting, an exemption that the client believes applies but has not registered is a live breach, not a defensible position.

Penalties, and the one nobody mentions

The gov.uk landlord guidance gives no figures. The regulations do, and the relevant provision for non-domestic property is regulation 41 — not regulation 40, which deals with domestic property. Reading the regulations as made:

• Breach of under three months: the greater of £5,000 and 10% of the rateable value of the property, with the penalty not to exceed £50,000
• Breach of three months or more: the greater of £10,000 and 20% of the rateable value, with the penalty not to exceed £150,000

These figures are taken from the instrument as made. Before relying on a specific amount in advice, check the in-force version for subsequent amendment.

The under-covered element is the second penalty. A publication penalty applies in both cases, and that means publication on the PRS Exemptions Register for a minimum of twelve months. For a landlord with an institutional covenant or a portfolio reputation, twelve months on a searchable public register of non-compliant landlords is frequently the more serious of the two sanctions, and it is rarely raised in advice.

What is proposed, precisely

The interim response published on 18 June 2026 responds to two earlier consultations: the 2019 "future trajectory to 2030" consultation, which ran from 15 October 2019 to 7 January 2020, and the 2021 "EPC B implementation" consultation, which ran from 17 March 2021 to 9 June 2021.

Its stated direction is:

• A higher standard of EPC B, "where cost effective"
• From 2031, applying to "all private rented buildings over 1,000 square metres"
• Buildings below 1,000 square metres "to continue to be subject to the current minimum standard of EPC E"
• The previously proposed interim EPC C milestone for 2027 "will not be taken forward"

The seven-year payback test and the exemptions regime remain. The document says the detail "will be set out in the forthcoming government response to the public consultations", and that legislation will be introduced "at the earliest opportunity".

Three cautions follow for anyone writing or advising on this. The document is labelled interim; the full response was still outstanding as at that date. Nothing takes effect until secondary legislation passes Parliament. And the 1,000 square metre threshold is the element most likely to be misreported, because it means the majority of small commercial units are not in scope of the EPC B proposal at all.

How to frame it on a file

The gap between what is in force and what is trailed creates two distinct advice problems, and they should not be run together.

For a letting or renewal today, the test is binary: EPC E or a registered exemption. There is no lawful route to granting a new tenancy of a sub-E property without one, and the April 2023 extension means continuing lets are caught too.

For a 2031-facing investment decision, the relevant questions are the proposed threshold, the cost-effectiveness qualifier and the payback test — all of which are proposals. A valuation or a lease negotiation that treats EPC B by 2031 as a settled legal obligation is pricing a risk that has not yet been legislated, and a tenant asked to accept a sustainability-linked obligation on that basis is entitled to ask what the obligation actually is.

Where a lease is being negotiated now with a term running past 2031, the useful output is not a prediction but a drafting position: who bears the cost of works required by a standard that does not yet exist, and on what trigger. That is a commercial allocation, and it is better made explicitly than left to a green lease clause that assumes a target may change.

Keeping the competence evidence

There is no commercial-property-specific CPD requirement in England and Wales. The SRA prescribes no minimum hours; the obligation is to reflect on your practice and address identified learning needs, declared annually on practising certificate renewal, as covered in our guide to SRA continuing competence.

For an area that moves by consultation response rather than by statute, the competence point is a dated note of what the law was when the advice was given. Our guide to contracting out of 1954 Act security of tenure covers the other half of the commercial letting compliance picture, where the rules have not moved but the failure rate is high, and the CQS 2026 requirements guide covers the residential equivalent.