The Minimum Energy Efficiency Standard Binds the Landlord — the Lease Decides Who Pays

Or it arrives sideways: a sublet refused because the space cannot be marketed, a rent review priced on an assumption the building does not meet, improvement works in a service charge estimate. All of it traces back to one prohibition, in force since 1 April 2023, which binds the landlord, not the restaurant, and hands it no remedy.

The prohibition is regulation 27 of the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (S.I. 2015/962), in force for non-domestic property since 1 April 2017 under regulation 1(3)(a), inserted 22 June 2016 by S.I. 2016/660:

Paragraph (a) bites at a transaction. Paragraph (b) catches a sitting restaurant, because it attaches to continuing to let: "From 1 April 2023, the requirement for non-domestic landlords to obtain at least an EPC E rating, unless they have registered a valid exemption, applies to all privately rented non-domestic properties (even where there has been no change in tenancy)."

Two limits come first. Section 42(1)(b) of the Energy Act 2011 makes a property a non-domestic PR property only if it "(i) is situated in England and Wales, (ii) is let under a tenancy, and (iii) is not a dwelling". A licence therefore falls outside the regime, and the Rating Manual says so: "The Guidance makes clear that the MEES Regs are not intended to apply to licences to occupy, only to leases, so licensors do not need to be concerned in the same way as landlords." Regulation 20(3) removes the shortest and longest terms. A property is not a non-domestic PR property if let "on a tenancy granted for a term certain not exceeding six months", unless the agreement "contains provision for renewing the term or for extending it beyond six months from its beginning" or the tenant "has been in occupation for a continuous period which exceeds 12 months". Nor is it one if let "on a tenancy granted for a term certain of 99 years or more".

Where a food hall pitch, concession, hotel or department-store unit or pop-up is held under a licence and not a lease, or on a term certain of six months or less, none of what follows reaches it. The carve-out turns on legal form, not venue: it is a question of substance, not title.

"Sub-standard" is narrower than it sounds, too. Regulation 22 reaches a property only "where the valid energy performance certificate expresses the energy performance indicator of the property as being below the minimum level of energy efficiency", and paragraph (b) puts it at "an energy performance indicator of band E", not C, not B. Paragraph (c) adds that the certificate must be on the register "no more than 10 years before the date on which it is relied on for the purposes of these Regulations". An expired certificate leaves a letting outside the prohibition, but only while nothing happens.

The instinctive reading is that a breach hands the tenant a lever. It does not:

The guidance puts both edges to tenants:

So a landlord cannot turn its own non-compliance into a reason to resist a Part 2 renewal under the Landlord and Tenant Act 1954, and nothing runs back the other way: the Rating Manual records that "The MEES change doesn’t affect the validity of any lease."

The duty to improve is the landlord's. Where the money goes is a drafting matter:

The guidance agrees: "Even where subletting is permitted, the lease may make specific provision for which party would be liable for improvement costs in any given situation." Both describe possibility, not prevalence, and no figure was found for how commonly leases route these works into service charge.

Three consequences land on the occupier. Underletting goes first: "Underletting: The tenant will not be able to underlet lawfully while the premises remain non-compliant." Rent review follows: "A tenant could, therefore, find itself paying a level of rent on the basis of the false assumption that they are compliant with the regulations and ignoring the reality that the premises could not be readily marketed." Entry is the third, and the lease governs it where the Regulations do not.

A letting sits outside the prohibition until a valid certificate exists:

It never says which modifications. The answer is in the EPC rules, and narrower than a refit budget assumes. Regulation 7A of the Energy Performance of Buildings (England and Wales) Regulations 2012 applies where:

Both limbs, together. A new extract canopy, a re-planned kitchen or a replacement boiler inside one unit changes no number of parts, so it triggers no certificate under regulation 7A. Carving a separately-let unit out of the premises (a takeaway counter, an upstairs let off) while running one of those four fixed services into it does. No published guidance or decision applies regulation 7A to a restaurant fit-out, and that reading is taken from the words of the provision alone.

The other route is not works. Regulation 7 is expressed to be "Subject to regulation 8", which carves out buildings to be sold or let with vacant possession for demolition. It applies where a building "is to be sold or rented out" and "no valid energy performance certificate is available for that building". The "relevant person", which regulation 2 defines for a letting as "the prospective landlord", "must secure that an energy performance certificate is commissioned for the building" "Before the building is put on the market". Regulation 7(6)(b) fixes that moment at availability being "with the intention of marketing the building, first made public". The certificate comes before the advertisement, not after.

Subletting does two things at once. It makes the restaurant a landlord in its own right, because regulation 21 defines "landlord" as a person who lets, or proposes to let, a non-domestic PR property. It also commissions the certificate that can make the premises sub-standard for the head landlord. The department says so: a tenant wishing to sublet "will be required to obtain an EPC to market the property", and "If this EPC shows an F or a G rating then the landlord will need to comply with the minimum energy efficiency provisions because the property now has a valid, legally required, EPC."

Two duties, two charges, both under the EPB Regulations. Regulation 11(2) requires the band to be stated "in any advertisement of the sale or rental in commercial media", and breach of that is a flat £200 under regulation 38(1)(e). Failing to commission or make available the certificate is the expensive one: 12.5% of rateable value, floored at £500, capped at £5,000.

That first limb settles the geography: every provision of S.I. 2015/962 is marked E+W.

Scotland's row rests on section 63 of the Climate Change (Scotland) Act 2009. The Northern Ireland row is evidence of absence, not a statement that none exists.

Almost every piece of advice warns about EPC C in 2027 and EPC B in 2030. On 18 June 2026 the Department for Energy Security and Net Zero published an interim response to the 2019 and 2021 consultations, and moved both.

Two statements beside it matter more: "the intention is for buildings below 1,000 square metres to continue to be subject to the current minimum standard of EPC E", and "the previously proposed interim EPC C milestone for 2027 will not be taken forward", which leaves flexibility "with no set deadline for going beyond this level". None of it is law:

Nothing has been laid. The response commits only to introducing it "at the earliest opportunity", and how the threshold would be measured could not be established. Meanwhile the government still publishes the superseded trajectory:

A restaurant budgeting for band C by 2027 is reading a page contradicted in June.

A sub-standard letting is lawful only where an exemption is registered, and "All exemptions apply from the point you register them". An exemption does not survive a sale, which is one reason a change of freeholder can be followed by an access request. A buyer of premises already let gets six months under regulation 33(3) to (5), and then only if it registers. Enforcement sits with the "Local Weights and Measures Authorities", which "may decide to use Trading Standards Officers or Environmental Health Officers", and a penalty notice reaches back 18 months. Regulation 41 sets ceilings, not tariffs: a penalty "not exceeding whichever is the greater of" £5,000 and 10% of rateable value under three months, never above £50,000; at three months or more, the greater of £10,000 and 20%, never above £150,000. Each carries a publication penalty covering "such of the following information in relation to a penalty notice as the enforcement authority decides", which may include the property's address and the restaurant's trading address, and which stays up "for a minimum period of 12 months".

How often any of that happens could not be established. No enforcement statistics, no named enforcement action and no First-tier Tribunal decision on non-domestic minimum standards was found for this article. The absence is itself the finding: it is neither evidence that enforcement is routine nor reassurance that it is not.

Keep this apart from the other premises duty that falls unevenly by nation. Fire safety binds the responsible person, usually the operator in control of the premises, and the recording position differs by nation: the fire risk assessment recording duty, and where the five-employee trigger still survives. The energy standard binds the landlord. The same shape recurs wherever a restaurant hosts equipment it does not own: the charge point rules bind the operator, not the restaurant whose car park it sits in, while a "free parking" line on a page is a promise the restaurant must honour.

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Whether a service charge clause can carry improvement costs, whether a rent review assumes compliance, and whether the landlord may enter during service are questions for the lease, and for the surveyor or solicitor reading it; no such promise is made here.