Post COP21, the run up to the end of this decade will see the arrival of a raft of legislation and with it opportunities with impacts for commercial landlords and developers in the UK property industry. Current estimates suggest the property industry will need to reduce its emissions by 77% by 2030 to meet projected COP21 targets.

 

It is evident therefore that regulatory interventions will increase as landlords, owners and managers of large property portfolios are mandated to deal with the intricacies of energy and climate change legislation compliance.  Indeed some have already arrived and more comes into force in the next 12 months.

 

With this as background, there is a need for impartial independent client-side challenge and validation to help landlords or building operators achieve optimal compliance with a clear strategy for onward investment strategies. All of which has synergies with the kind of specialist building performance advice that we can provide to unlock the more complex MEES compliance issues.

 

Minimum Energy Efficiency Standards (Private Rented Property) Regulations

From 1 April 2016,  tenants were permitted to ask for reasonable and relevant energy efficiency improvements to the demised property.  A relevant improvement will only be reasonable if it can be funded by a government grant or tenant funding.  We act as advisors to the landlord or tenant to help them arrive at a set of reasonable and cost-effective proposals to protect their interests and secure optimal funding.

 

From 1 April 2018, subject to some exemptions, all new, renewed or extended property leases must have an Energy Performance Certificate (EPC) rating of at least “E” in place before the property transaction can take place.

 

From 1 April 2020, all domestic property (including existing tenancies) must have the minimum E rating. Non-domestic properties have until 1 April 2023 (including existing tenancies) to ensure they meet the E rating.

 

We can assist landlords or tenants to arrive at an optimised minimum cost proposal to get to an EPC of E for the property, or if possible to prepare an exemption statement, while simultaneously undertaking a review of all options that could have a commercially viable payback for the property.​

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ESOS (Energy Savings and Opportunities Scheme)

ESOS applies to all businesses with 250 employees or more, or circa £40 million or more annual turnover. Companies who are in the mandatory scheme will already have been advised by the Environment Agency to submit the first breakdowns of all energy.

 

Local Authority and Part L2A Compliance

We are adept in assisting clients, developers and prospective tenants to develop Energy Assessments for planning compliance with tightening zero carbon requirements.

 

For example, the Greater London Authority has set particularly onerous requirements for zero carbon homes to be achieved by October 2016 and commercial property to be 35% below Part L2013 at this date.

 

There is also limits on overheating, requiring a full assessment to be undertaken. In addition, there is a Combined Heat and Power first for the provision of heating to a property (although we are aware that this is now under review due to pollution concerns). All of these require a strategic approach to be arrived at to understand and minimise the costs associated with compliance.

 

There is a tendency for consultants to “fudge” the calculations to gain compliance.  At Ollio we see that low carbon comfortable property that does what it says on the tin, is ultimately of greater value to the owner which is why we only put forward solutions that we know stand a chance of success by real people in use.

 

“Every real estate asset owner, investor and stakeholder must now recognise they have a clear fiduciary duty to understand and actively manage environmental, social, governance (ESG) and climate-related risks as a routine component of their business thinking, practices and management processes.” 

 

UN Sustainable Property Fiduciary Report

 

 Tag Words; Property ESG; Property Portfolio Management; Property Fiduciary Duty; GRESB; Sustainable Real Estate Investment