Where MEES stands now
The Minimum Energy Efficiency Standards regulations currently prohibit the letting of commercial properties with an EPC rating below E in England and Wales. The June 2026 DESNZ Interim Response confirmed that the previously consulted 2027 EPC C milestone is no longer being pursued. The proposed EPC B requirement would apply to privately rented non-domestic buildings above 1,000 m²; buildings below 1,000 m² remain subject to the EPC E requirement. Secondary legislation is still required and the final framework has not yet been enacted.
For institutional landlords with large commercial portfolios, the implication is significant. A substantial proportion of UK commercial stock — particularly older office and retail assets — does not currently meet EPC B. The cost and complexity of achieving compliance varies enormously by asset type, tenure, and existing fabric condition.
Why EPC ratings are only the starting point
EPC ratings for non-domestic buildings are produced under the Standard Assessment Procedure for Business Energy and Carbon Reporting (SBEM) — a theoretical, asset-based assessment of a building's energy performance based on its fabric and fixed building services. They do not reflect actual operational energy consumption.
This creates an important planning consideration for landlords: improving an EPC rating does not necessarily reduce actual energy consumption or carbon emissions, and vice versa. A building that has been extensively upgraded operationally may still carry a poor EPC rating if the assessment has not been updated to reflect those improvements.
The first step for any landlord building a MEES compliance roadmap is therefore a current EPC audit — confirming which assets have valid EPCs, what their current ratings are, and critically, whether those ratings reflect the current condition of the asset.
Prioritisation framework
With potentially significant numbers of above-threshold assets requiring attention ahead of the eventual EPC B compliance window, a structured prioritisation framework is essential. We recommend sequencing around four factors:
Lease events — assets with lease renewals, rent reviews, or lease expiries in the next three to five years carry the highest regulatory and commercial risk. A void property with a sub-E EPC cannot be re-let under current regulations. A sub-B above-threshold asset facing a lease event creates a negotiating vulnerability ahead of secondary legislation.
Current rating, threshold status and gap to compliance — assets currently rated E or F require immediate attention. For above-threshold (>1,000 m²) assets, assets rated D require a credible EPC B plan and assets rated C require active monitoring. Sub-threshold assets remain on the EPC E regime.
Improvement cost and feasibility — some assets can achieve rating improvements through relatively low-cost interventions — lighting upgrades, heating controls, insulation improvements. Others require more significant fabric or plant investment. Early feasibility assessment avoids late-stage budget surprises.
Tenant cooperation — in multi-let assets, many improvement measures require tenant cooperation or access. Understanding which leases contain green clauses or energy management obligations — and which do not — is critical to delivery planning.
Capex sequencing
A common mistake in MEES compliance planning is treating all assets as requiring the same intervention. In practice, the most cost-effective route to portfolio compliance combines:
- EPC reassessments where existing ratings understate current performance
- Targeted low-cost improvements on assets close to the threshold
- Planned capital investment programmes on assets requiring significant works
- Hold/sell decisions on assets where improvement cost exceeds strategic value
The sequencing of these interventions against lease events and planned asset management activity minimises both cost and disruption.
Tenant engagement
Green lease clauses — provisions requiring tenants to share energy data, permit access for improvement works, and cooperate with sustainability obligations — are increasingly standard in new institutional leases. However, many existing leases predate green lease provisions entirely.
For assets with legacy leases and sub-compliant EPC ratings, early tenant engagement is essential. Waiting until a lease event to initiate improvement conversations risks delay and cost escalation.
Documentation and defensibility
MEES compliance is ultimately a regulatory obligation with potential financial consequences for non-compliance. Building a defensible compliance record — current EPCs for all assets, improvement plans with committed timelines, records of tenant engagement — is as important as the physical improvements themselves.
NZC Consultants provides commercial EPC assessments and MEES compliance reviews, and portfolio-wide improvement planning. Get in touch to discuss your portfolio.