The Mezzanine That Changed the EPC Requirement
We were asked to assess a unit let to a fitness studio with a gross internal area reported to us as below 1,000 m².
The tenant had previously had permission to install a steel frame mezzanine within the main exercise area which was properly designed with full structural calculations submitted to the landlord. Nothing unusual there, but during the EPC inspection, however, we discovered something else. The tenant had also boarded out a large area above the offices, changing rooms and toilets, creating additional usable floor space next to the mezzanine and the landlord had never authorised it.
Why did it matter?
The approved mezzanine was around one third of the original ground floor area and the unauthorised area was also around one third. Together, they increased the building's gross internal area to more than 1,000 m². That matters because the proposed future MEES requirements could mean buildings over 1,000 m² need to achieve an EPC B by 2031. So what initially looked like a tenant fit out issue had potentially become a significant asset management issue.
The important point for landlords
The landlord had known about the approved mezzanine but the second area had effectively appeared without their knowledge. But for EPC purposes, the question is not whether the landlord authorised the alteration. If the additional floor area forms part of the building being assessed, it affects the building's overall GIA and therefore its regulatory position. This suggests a difficult conversation between the landlord and tenant is imminent. For asset managers, this is a useful reminder to keep an eye on changes tenants make to buildings. Mezzanines, extensions and other alterations can change more than the appearance or functionality of a property. They can potentially change its EPC requirements and future MEES exposure. In this case, two mezzanine areas of roughly equal size had taken a building from below the 1,000 m² threshold to above it. And one of them had never even been approved by the landlord.
The lesson?
Know what your tenants have actually built, not just what you think they have built. There is plenty of time to find a resolution now, but closer to 2031 this could be a very difficult situation.
Could additional floor space affect your property's EPC requirements?
We've put together a short MEES 2031 reference guide, including a practical mezzanine floor area decision tree to help identify where further assessment may be needed.