5 questions on MEES that you were afraid to ask
Revo recently hosted a lively and interactive panel discussion at RPC looking at how MEES could impact the retail sector.
Dan Grandage, Head of Responsible Property Investment at Aberdeen Asset Management plc, Tim Snaith, Head of Store Care, Energy Care and Group Engineering at Boots and David Johnston of RPC comprised the panel. Audience members including asset managers, retail occupiers, consultants shared knowledge and experience on the topic.
Five most interesting points discussed:
1. Who should pay - Landlords or Tenants?
There was a consensus that where improvements were required to the fabric of a building then those costs should fall to the landlord. However, tenants need to understand that it is often their fit out that has the greatest effect on the rating which is why landlords will be more prescriptive in what they will approve during the design process.
2. Can I trust my EPC?
There is a feeling that the quality of current EPCs is variable and there were examples mentioned of assessors who had not visited premises, had not taken into account refurbishment work and those who work on a desktop study basis without any checks to confirm the situation on the ground. This was especially true for EPCs produced in 2008 as when the Energy Performance of Building Regs were first introduced, there were no requirements for an accredited assessor to visit the property and relied on technicians to do that. This highlighted the importance of closer scrutiny of the assessment, the assumptions the assessor is making and the need for the industry to challenge assessments which seem clearly misleading.
3. When can I get an EPC done to reflect the new rather than the old fit-out?
What can we do where a retailer wants to finish their fit out on one day and commence trading the next, or occasionally within hours of completion. A suggestion was made that a draft EPC could be finalised at the point that Building Regulations Consent was applied for but landlords would need to look at their retail delivery processes to make them more flexible on EPC assessment.
4. What happens on renewals?
One of the most controversial subjects arose from the apparent difference between market practice where EPCs are not considered necessary on a lease renewal and a more cautious approach requiring EPCs on every new lease (including renewal leases). There also seems to be disconnect between EPB regs and MEES as the latter explicitly includes renewals whereas the former is less clear. Watch this space as the lawyers try and figure out what is required.
5. What is the point?
Everyone agreed that it was important not to lose sight of the objective of MEES which aim to increase energy efficiency of buildings and to improve the efficiency of occupied buildings over time. As ever landlords and tenants will need to collaborate more to meet this shared objective and to think of ways to avoid wrangling over who pays.
Revo also has a Guidance Note for members coming out soon to give you indepth information on this topic!