From 1 October 2008 sellers and landlords are required by law to provide an Energy Performance Certificate (EPC) for all buildings or parts of buildings when they are sold or rented.
An Energy Performance Certificate gives prospective buyers or tenants information on the energy efficiency and carbon emissions of a building.
The certificate provides energy efficiency with a rating system of A-G and recommendations for improvement. EPCs were first introduced for the sale of domestic homes, as part of the Home Information Pack also known as a HIP. Although from April 2008 this was extended to newly built homes and large commercial properties. The ratings (similar to those found on products such as fridges) are standard so the energy efficiency of one building can easily be compared with another building of a similar type.
From April 2018, the proposed legislative changes would make it unlawful to let residential or commercial properties with an EPC Rating of F or G (i.e. the lowest 2 grades of energy efficiency). This could have very significant implications for landlords and for occupiers who wish to assign or sublet space, including: Marketability of some properties would become impossible unless they were upgraded to meet the minimum standards. It is estimated that approximately 20% of non-domestic properties could be in the F & G rating brackets. Further clarification on the transactional trigger for minimum energy standards is awaited; however, the new minimum standards could apply to all lettings and re-lettings, including sub-lettings & assignments. Valuations of such properties could be affected if their marketability is diminished. Rent reviews for properties in this situation could also be affected. Implications for dilapidations assessments would also exist.
For a building to fall within the requirement for an EPC it must have a roof and walls and use energy to condition the indoor climate (i.e. has heating, air-conditioning or mechanical ventilation) then you will require an EPC.
Any Commercial Property on the market before 1st October 2008 and remaining on the market will need an EPC by 4th January 2009 at the latest. If it is sold or rented out in the meantime, an EPC must be commissioned and then handed to either your agent or solicitor.
The seller or landlord is responsible for ensuring that an EPC is available to a prospective purchaser or tenant at the earliest opportunity and no later than when a viewing is conducted or when written marketing information is provided about the building, or in any event before entering into a contract to sell or let.
EPCs are produced by accredited energy assessors and for commercial properties are valid for a period of 10 years, or until a newer EPC is prepared. EPCs are not required before the construction of a building is completed, nor are they required on the sale, rent or construction of: -
- Places of worship.
- Temporary buildings with a planned time of use less than two years.
- Stand alone buildings with a total useful floor area of 538 square feet (50 metres squared) that are not dwellings.
- Industrial sites, workshops and non-residential agricultural buildings with low energy demands.
As the purpose of EPCs is to enable potential buyers and tenants to consider energy performance of a building as part of there investment or transactions which do not involve a new owner or tenant may not require an EPC. Examples of this are: -
- Lease renewals or extensions ro existing tenants.
- Compulsory purchase orders.
- Lease surrenders.
Bradleys Countrywide has formed a partnership with a number of qualified assessors in order to provide a cost effective and accurate EPC. If you are unsure on any of the above information then please do not hesitate to contact our office and speak to one our helpful members of staff. Further information can be obtained from the Dept for Communities and Local Government website: www.communities.gov.uk