At Jamieson Law, we have seen numerous leases where landlords explicitly stress the importance of environmental performance. These clauses can have practical implications, for example, influencing responsibilities for energy audits, upgrades, or reporting. So, tenants should review them carefully and seek guidance to understand their obligations and rights.
In Scotland, energy-efficiency rules for buildings are evolving fast. This article explains the current legal landscape, upcoming reforms, and practical steps to ensure compliance and reduce energy costs.
Disclaimer: This article is for informational purposes and does not amount to legal advice. For tailored advice on energy-efficiency obligations in your property, contact Jamieson Law.
What is an EPC (Energy Performance Certificate)?
- An EPC provides an energy efficiency rating for a building (or a unit). In Scotland, the EPC methodology differs from that in England & Wales, so ratings are not directly comparable.
- Ratings run from A (most efficient) to G (least efficient), with a numerical score. The certificate also includes a recommendations report suggesting improvements and their cost.
- An EPC is valid for 10 years (under the current regime!).
When and where EPCs are required
(Commercial / Non-Domestic Properties)
All non-domestic buildings in Scotland must have an EPC when sold or let to a tenant, or when construction is completed.
- If a building (or unit) has a floor area over 1,000 m², an Action Plan is also required at the point of sale or letting.
- Some buildings are exempt from requiring an EPC. Examples include:
- Standalone buildings (non-dwellings) with a useful floor area under 50 m²
- Temporary buildings intended for use for two years or less
- Buildings with low energy demand (e.g. certain workshops, agricultural buildings)
- Public buildings (or units) over 500 m² with frequent public access must have the EPC visibly displayed (if one exists). The display duty transfers from owner to occupier if the building is not owner-occupied.
- Note: An EPC is not required on renewal or extension of an existing lease, or on assignation of a tenant’s interest.
Enforcement & Penalties
Local authorities enforce EPC and AEP rules. Breach of duties such as failing to (i) make an EPC available, (ii) show it in advertising, and (iii) display it in public buildings, may lead to penalty charges (commonly up to £1,000). With the forthcoming reforms, more rigorous auditing and enforcement measures are expected.
Upcoming Changes: EPC Reform & MEES
The energy-efficiency regime in Scotland is set for its biggest overhaul in years. The Energy Performance of Buildings (Scotland) Regulations 2025 which will come into force on 31 October 2026:
| Reform area | What is changing | Why it matters |
|---|---|---|
| New EPC methodology | EPCs will transition from the Standard Assessment Procedure (SAP) and Reduced Data Standard Assessment Procedure (RdSAP) to the UK Home Energy Model (HEM) for all properties. | Provides more robust, consistent, and comparable energy performance metrics across Scotland. |
| New EPC design & metrics | EPCs will include 3 ratings: Heat Retention, Heating System, and Energy Cost, with both current and potential ratings displayed. | Gives landlords and tenants more granular, actionable information on energy efficiency and upgrade options. |
| Shorter validity | EPCs will be valid for 5 years instead of 10. | Encourages more regular reassessment to maintain accurate, up-to-date performance data. |
| Digital EPC platform | EPCs will be accompanied by an interactive online interface, while printable/PDF versions remain available. | Users can explore how different upgrades affect ratings and energy performance. |
| Strengthened auditing & enforcement | A new onsite audit and inspection regime will oversee EPC assessors and approved organisations. | Improves accuracy, consistency, and reliability of EPCs, ensuring confidence in the system. |
| Transitional arrangements | EPCs issued under the old methodology will remain valid for a short transitional period but will be marked historic after 31 October 2026. | Ensures a smooth transition while phasing out outdated certificates. |
The Heat in Buildings (Scotland) Bill is also expected to introduce powers to regulate heat decarbonisation and set minimum standards across both commercial and residential sectors, potentially requiring upgrades to heating systems, insulation, and energy infrastructure.
As for Minimum Energy Efficiency Standards (MEES), these currently do not apply to commercial landlords in Scotland, which has its own energy performance legislation. However, the Scottish Government plans to introduce regulations for non-domestic buildings in the future to support its net-zero targets. Landlords should stay informed and be prepared for potential requirements to improve energy efficiency.
Plan ahead! once these reforms come into force, commercial landlords and tenants will need to act promptly to ensure compliance and protect the marketability of their buildings.
Steps You Can Take RIGHT NOW
- Check your current EPC status
- When was your EPC issued? If it’s nearing expiry (or already old), you may need a new assessment under the new rules.
- Review the recommendations report: which upgrades will yield the best return?
- Budget for more frequent assessments
- Under the reformed regime, EPCs every five years may become mandatory.
Maintenance, energy modelling, meter monitoring – these all need regular review.
- Under the reformed regime, EPCs every five years may become mandatory.
- Incorporate energy clauses into leases
- Ask for flexibility: who bears responsibility (landlord or tenant) for EPC compliance, upgrades, or remedial works?
- Clarify rights and obligations around energy audits, disclosure of certificates, and consent to improvements.
- Plan and prioritise upgrades
- Use the EPC recommendations report to chart feasible improvements (e.g. insulation, glazing, HVAC upgrades).
- Monitor energy usage to detect inefficiencies or leaks.
- Watch the reform timetable
- The transition to new EPC regulations begins 31 October 2026.
- Keep your eyes peeled for MEES proposals and consultations affecting non-domestic properties.
- Seek advice early
- Act early on energy performance: weave it into your ongoing asset management and ensure it’s reflected in your commercial leases.
Why This Matters (beyond compliance)
- Marketability & value: A building with a strong energy performance is more attractive to tenants and may command a premium or lower voids.
- Future lettability: Once MEES or stricter standards apply, failing buildings may struggle to let at all.
- Cost savings: Efficiency upgrades often reduce long-term operating costs (energy, maintenance).
Final Thoughts
The rules around energy performance are shifting, and not just incrementally. The launch of the Energy Performance of Buildings (Scotland) Regulations 2025 in late 2026 will reshape how landlords and tenants think about energy and compliance. By taking proactive steps now: commissioning up-to-date EPCs, planning upgrades, and embedding energy obligations in leases, you can avoid compliance pitfalls and future-proof your commercial building.
If you have questions about how energy efficiency requirements will affect your property or want help negotiating clauses in a lease or planning upgrades, get in touch with us at Jamieson Law.
