Advisers must check that clients with commercial property held in a Sipp or Ssas know about upcoming changes to EPC ratings, as there is a risk of fines and enforcement action if there is a failure to comply.
Current rules under the Minimum Energy Efficiency Standards has meant that commercial property needs to have an EPC of band ‘A to E’ in place if it is to be either sold or let, or the property must have a valid exemption from these regulations.
However from April 1, while commercial properties with an EPC rating of below E cannot be sold or let to new tenants, a new requirement is being introduced, which means properties with an EPC rating below E cannot continue to be let to existing tenants.
If a Sipp or Ssas holder continues to let their building, they are at risk of enforcement action leading to significant fines.
In some cases a building could be exempt from the new rules, however if the building is exempt that exemption does still need to be registered.
Providers have said that while the change in regulation does not come into force until 1 April 2023, they are expecting it to become more difficult to engage a provider of EPC’s the closer it gets to the deadline.
Nathan Bridgeman, director of SeaBridge Ssas, said: “All commercial property owners are affected by this yet there is a huge lack of awareness out there from commercial property owners and their advisers.
“We urge commercial property owners to act now as the closer we get to April the more difficult it will be to get an EPC or register for an exclusion as there isn’t the capacity in the market to undertake all the EPCs that are required.”
He added that a lot of Sipp and Ssas providers are running legacy books and do not have “proactive admin” so are not engaging with advisers and their clients to make them aware of what they need to do.
Bridgeman added: “We wrote to all our clients and advisers twice last year with a nudge / reminder at the start of this year. We are directing people to one of our partners that provides low cost EPCs.
“Not all Sipp and Ssas providers are on the front foot with their advisers and clients. We are taking over schemes with commercial property where the ceding scheme has not informed the adviser or the scheme members of these changes in legislation and the penalties for non-compliance”.
amy.austin@ft.com
