Energy Performance Certificates (EPCs) have been part of property transactions for years, but they are about to become much more than an administrative exercise. Upcoming changes to energy efficiency regulations will have direct implications for both landlords and tenants, with key milestones approaching in 2027 and 2030. Understanding these changes now can help avoid disruption, unexpected costs and delays later.

What is changing?

 Currently, most commercial and residential rented properties must achieve a minimum EPC rating of E to be legally let. This is expected to tighten significantly as part of the UK’s wider push towards net zero carbon emissions.

The government has confirmed its intention to raise the minimum standard for rented properties to an EPC rating of C for new and renewed Leases in 2027 and in 2030 this will include existing Leases. While further detail is still emerging, the direction of travel is clear: properties with poor energy performance will become harder, and in some cases unlawful, to let.

What does this mean for landlords?

 For landlords, EPC ratings will increasingly affect income, asset value and risk. Properties below the required standard may not be lettable, leading to void periods or enforcement action. Fines for non‑compliance are expected to rise significantly, with penalties of up to £30,000 per property being proposed.

There is also a clear investment implication. While a cost cap of £10,000 per property has been announced, works such as upgraded insulation, improved glazing or changes to heating systems can still be disruptive if left too late. The biggest risk is not the cost itself, but poor planning, carrying out upgrades during a void or alongside other planned works is almost always more efficient than reacting under time pressure.

Planning for how to approach the 2030 increase on existing Leases is key, as improvements will need to be carried out with Tenants in-situ, which has not only impacts the logistics of carrying out the works, but Landlord’s should seek legal advice in terms of their rights under the Lease to access the properties in order to undertake the works, without breaching ‘Quiet Enjoyment’ clauses.  Landlords may also be able to share the burden of the improvement works with Tenants through Service Charge or via Green Lease clauses.

And what about tenants?

 Although the main focus of these changes is on Landlords and their ability to let properties, Tenants are by no means immune from these changes as in some circumstances they will ultimately pick up the cost for the necessary improvements.

EPC compliance can affect lease negotiations, occupation dates and fit‑out plans. In some cases, a tenant may not be able to occupy a space until required upgrades are completed, causing delays to business operations and Landlords may restrict fit out plans to reduce the impact of these on the EPC score, which may lead to costly alternative options.

Green lease clauses are also becoming more common, placing obligations on tenants to avoid changes that would reduce a building’s EPC rating. This can affect how premises are fitted out or altered during the lease term, through restrictions on alterations or through enforcing reinstatement during the Term of a Lease, which could be costly and disruptive. Ultimately, EPCs are no longer just a landlord issue they are becoming a shared commercial consideration.  Tenant’s may also pick up the cost of EPC improvement works via service charge, where clauses allow for meeting statutory demands.

What should businesses do now?

 The key is early visibility and integration into asset planning. Both Landlords and Tenants should review existing EPCs, identify properties most at risk, and align improvement works with planned refurbishments or lease events. Tenants should ask EPC‑related questions early in negotiations and understand how future changes might affect their fit out plans, occupation and costs.

The 2030 deadline may feel distant, but the 2027 deadline is now less than twelve months away and the busiest, most expensive scramble will be just before compliance becomes mandatory. Those who plan now will have more options, greater certainty and better long‑term outcomes.