Ashfords Solicitors - Energy Performance Certificates

Energy Performance Certificates (EPC's) have had a lot of press recently (particularly with the associated furore over home information packs) but have not, until now, been required for any anything other than residential properties. This has now changed with the first phase of a requirement for an EPC for non-residential buildings being introduced this month.

As of 6 April 2008, an EPC is required for the construction, sale or renting-out of non-residential building with a total useful floor area over 10,000 sq metres. This qualifying space will be lowered to incorporate buildings with a useful floor area over 2,500 sq metres from 1 July 2008.

From 1 October 2008 an EPC will be required for the construction, sale and renting-out of any other non-residential building save for very limited exceptions. These exceptions include:

a) non-residential buildings with a floor area of less than 50 sq metres;

b) buildings used as places of worship;

c) qualifying temporary buildings; and

d) workshops, industrial sites and non-residential agricultural buildings with low energy demand which satisfy prescribed criteria

There are transitional arrangements for buildings already on the market before 6 April 2008 but all buildings will be required to have an EPC by 1 October regardless of when they were first marketed.

The penalty for a landlord or seller of commercial property who fails to provide an EPC where required to do so is a minimum fine of £500 rising to a current maximum of £5,000. It remains to be seen what steps will be taken to enforce the Regulations but there is at least some hope that an element of common sense will be applied. For example, initial guidance issued by the Department for Communities & Local Government back in January 2008 suggested that a penalty charge notice should not be issued on a renting-out of a property where:

a) a prospective tenant was seeking to rent a building in emergency that required the tenant's urgent relocation; and

b) the landlord did not have a valid EPC at the time of the letting;

c) there was insufficient time for the landlord to be reasonably expected to have obtained an EPC before the letting completed; and

d) the landlord has given an EPC to the tenant as soon as reasonably practicable afterwards

The requirement for an EPC is the latest in a long line of regulatory regimes affecting commercial properties that has been introduced or reformed over recent years. The extra duties and liabilities such regulations impose mean that, whilst there may be some merit behind them, it is now more important than ever for property owners and tenants to ensure they are fully aware of what the regulations are and what they need to do to ensure compliance.

Ashfords is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.

20th May 2008

Energy Performance Certificates

Introduction