Nearly two-thirds of UK commercial tenants are unaware that the energy performance rules for their buildings are about to change in ways that could cost them thousands. That figure comes from a recent industry survey, and it matters because from the second half of 2026, landlords will be required to maintain a valid Energy Performance Certificate (EPC) throughout the entire tenancy — not just at the start. If your lease doesn’t already account for that, you could end up paying for upgrades you didn’t plan for.
I’ve been covering commercial property law for long enough to notice a pattern: tenants tend to focus on rent and location, then get caught out by the regulatory shifts that creep up on them. The changes coming in 2026 are bigger than usual. EPC reform, business rates revaluation, a potential ban on upward-only rent reviews, and inheritance tax relief changes will all affect how leases are negotiated and what they cost. Here’s what you actually need to know.
If you’re currently negotiating a lease or planning to renew one, these aren’t distant hypotheticals. They’ll affect your rent, your service charge, and your legal obligations. I’d start by checking your current EPC expiry date and your lease’s repair and upgrade clauses — because the green lease provisions many landlords are already introducing will become much harder to push back on once the law changes. A practical first step is to speak with a tenant landlord lawyer who can review your existing lease against the upcoming requirements before you’re locked into a new term.
What the 2026 commercial property law changes actually mean for your lease
The most immediate consequence for tenants is that your lease will no longer be a static document. The days of signing a ten-year lease and forgetting about energy compliance are ending. Under the new rules, landlords must keep a valid EPC in place for the whole tenancy, and the EPC itself will be more demanding — measuring fabric efficiency, heating efficiency, smart-technology readiness, energy use, and carbon emissions rather than a single score. That means more frequent re-certification and, for many buildings, the need for physical upgrades.
What I’d do right now is check whether your building’s EPC expires during your current lease term. If it does, and the new certificate comes back with a lower rating, your landlord may need to carry out improvements — and the lease will determine who pays. Many older leases don’t address this clearly, which is where disputes start. The service charge provisions in your lease are the first place to look for cost recovery clauses that could pass those upgrade costs back to you.
Why the business rates revaluation matters more than you think
Business rates are being revalued on 1 April 2026, based on rental values as of 1 April 2024. That sounds technical, but it has a direct effect on your bottom line. The new five-tier multiplier structure means retail, hospitality and leisure properties with a rateable value below £500,000 will benefit from lower multipliers, while properties valued at £500,000 or more will face a higher “high-value” multiplier. If your business operates from a smaller high-street unit, you could see a real reduction. If you’re in a large distribution centre or office block above that threshold, expect an increase.
Transitional relief will phase in the larger increases gradually, but the direction of travel is clear. The government is using business rates to support the high street and hospitality sectors, funded by larger premises. For tenants, the practical step is to check your current rateable value against the new thresholds and factor the likely change into your rent negotiations. If your landlord passes rates through to you as an additional charge, a reduction in your multiplier strengthens your negotiating position on the overall rent package.
I’ve seen tenants accept rateable values without question because the process feels opaque. But the Valuation Office Agency does get it wrong, and the Check, Challenge, Appeal system exists for exactly that reason. If your property was valued during a period when rental values were unusually high, you may have grounds to reduce your bill before the new multiplier locks in. A real estate lawyer can help you assess whether a challenge is worth pursuing based on comparable properties in your area.
Where tenants get caught out by the 2026 reforms
The most common mistake I see is assuming existing leases will carry on as before. They won’t. Here are the specific traps to watch for.
Ignoring the EPC maintenance requirement until it’s too late
Under the current rules, you need an EPC when you grant or renew a lease. From late 2026, you’ll need one for the entire duration. If your EPC expires mid-tenancy and the new certificate shows a lower rating, the landlord may be legally required to upgrade the building — and if your lease has a general repair obligation or a service charge that covers “compliance with law”, you could be footing the bill. The fix is to review your lease now and, if it’s ambiguous, negotiate a specific clause that caps your liability for energy efficiency upgrades. The institutional lease structures used by larger landlords often already include these provisions, but smaller landlords may not have updated their templates yet.
Assuming upward-only rent reviews protect you from increases
They don’t protect you — they protect the landlord. Upward-only rent reviews mean your rent can only go up, never down, regardless of market conditions. The proposed ban on upward-only reviews in new commercial leases would change that, allowing rents to fall when market conditions weaken. But here’s the catch: the ban applies only to new leases and lease renewals. If you’re in an existing lease with an upward-only clause, it stays in place until you negotiate a new term. If you’re approaching a break clause or renewal, now is the time to start conversations about removing or modifying that clause before the legislation forces the issue.
Overlooking the inheritance tax implications of your business property
This one catches business owners who hold commercial property personally and lease it to their own company. From 6 April 2026, Business Property Relief and Agricultural Property Relief combine into a single £1 million allowance at 100% relief, with only 50% relief on values above that. For a business owner with a property worth £2 million, the inheritance tax charge on the excess could be significant. The change also affects shares in unlisted companies, including AIM-listed shares, which will now receive only 50% relief. If you’re planning succession or restructuring, this needs to be factored into your timeline. A financial advisor can model the impact based on your specific asset structure.
→ Scroll right to see all columns
| Change | Effective date | Key threshold | Tenant action needed |
|---|---|---|---|
| EPC reform (multiple metrics, shorter validity, continuous requirement) | H2 2026 | All commercial properties; listed buildings may be included | Check EPC expiry; review repair/upgrade clauses in lease |
| Business rates revaluation and new multiplier structure | 1 April 2026 | £500,000 rateable value | Verify rateable value; consider Check, Challenge, Appeal |
| Ban on upward-only rent reviews (new leases) | Pending legislation (first reading completed) | New commercial leases and renewals only | Review break clauses; negotiate rent review mechanism now |
| BPR and APR combined allowance | 6 April 2026 | £1 million per person at 100% relief | Review succession plans; model inheritance tax exposure |
How to prepare your commercial lease for the 2026 changes
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The window for proactive negotiation is now, before the changes take effect and landlords adjust their standard terms. Here’s what to prioritise.
Audit your EPC status and lease clauses
Start with the basics. Find your current EPC, note its expiry date, and check whether your lease has a “compliance with law” clause or a service charge that covers energy improvements. If the EPC expires during your term, you need to know who bears the cost of re-certification and any resulting upgrades. If your lease is silent on this, ask your landlord to agree a side letter capping your liability. I’d also check whether the building has any listed status that could bring it into the EPC regime for the first time — heritage buildings have been exempt until now, but that’s expected to change.
Negotiate rent review terms before the ban arrives
If you’re entering a new lease or renewing an existing one, don’t wait for the legislation to force the issue. Ask for a rent review mechanism that allows downward movement based on market conditions. Even if the landlord resists, having the conversation now establishes a record that you raised it. If the ban does pass, leases signed after the legislation takes effect will be subject to the new rules automatically — but leases signed before may be grandfathered. The timing of your signature matters. A business lawyer can advise on whether delaying your lease signing until after the legislation passes would benefit you.
Factor the business rates revaluation into your rent budget
Your rent and your business rates are linked through the rateable value. When rates are revalued in April 2026, the change in your bill could be significant — either up or down depending on your property’s value and sector. If you’re in retail, hospitality or leisure and your rateable value is under £500,000, you’re likely to see a reduction. If you’re above that threshold, budget for an increase. Use the Check, Challenge, Appeal process if you believe your valuation is inaccurate. The deadline for challenges is tied to the revaluation date, so don’t leave it until after April 2026.
Review your succession plan for inheritance tax changes
If you own commercial property personally and lease it to your business, the BPR and APR changes from April 2026 could create a significant inheritance tax liability. The new £1 million allowance at 100% relief is generous for smaller holdings, but anything above that receives only 50% relief — creating an effective 20% tax charge on the excess. For a property worth £2 million, that’s £200,000 in inheritance tax that wouldn’t have applied under the old rules. If you’re planning to pass the business to family members, consider restructuring ownership or using life insurance to cover the potential liability. The factors that drive commercial rent prices also affect property valuations, so understanding your building’s market position helps you estimate its likely value for inheritance purposes.
- 1Check your EPC expiry and lease clausesFind the current EPC certificate, note the expiry date, and review your lease for “compliance with law” and service charge provisions that could pass upgrade costs to you.
- 2Negotiate rent review terms nowIf you’re signing a new lease or renewing, ask for a mechanism that allows downward movement. The proposed ban on upward-only reviews gives you leverage even before it becomes law.
- 3Verify your rateable value and challenge if neededUse the Valuation Office Agency’s online tool to check your rateable value. If it seems high, start the Check, Challenge, Appeal process before the April 2026 revaluation locks in.
- 4Model your inheritance tax exposureIf you own commercial property personally, calculate its current value and apply the new £1 million allowance and 50% relief above that. Factor the result into your succession planning.
Frequently asked questions about the 2026 commercial property law changes
Will the EPC changes apply to my existing lease? ▾
Can my landlord pass the cost of EPC upgrades to me through the service charge? ▾
What happens if my landlord refuses to remove the upward-only rent review clause? ▾
How do I challenge my business rates valuation? ▾
Does the BPR change affect shares in my own company? ▾
Sources and Further Reading
The future of retail: reimagining UK commercial spaces — How changing retail patterns affect lease values and what tenants should watch for in the next five years.
Commercial property hotspots: where UK businesses are investing now — Regional analysis of rental trends and investment activity that informs rateable value expectations.
A practical guide to upcoming commercial property law changes in 2026. Longmores Solicitors, 2025.
Commercial property law changes coming in 2026. SO Legal, 2025.
Key legislative and legal updates for 2026. James & Sons, 2025.
