An Energy Performance Certificate (EPC) rates how energy efficient your building is using grades from A to G (with ‘A’ the most efficient grade).
Changes to the current regulations come into effect from 1 April 2018 and mean that it will be unlawful to let or lease a residential or commercial property with a poor EPC rating.
The Government’s website covering this regulation states that you can be fined between £500 and £5,000, based on the rateable value of the building, if you don’t make an EPC available to any prospective buyer or tenant.
You must have an EPC if:
- you rent out or sell the premises
- a building under construction is finished
- there are changes to the number of parts used for separate occupation and these changes involve providing or extending fixed heating, air conditioning or mechanical ventilation systems.
When you must display an EPC certificate
You must display an EPC by fixing it to your commercial building if all these apply:
- the total useful floor area is over 500 square metres
- the building is frequently visited by the public
- an EPC has already been produced for the building’s sale, rental or construction
Significant Implications
This has some significant implications for landlords, and for occupiers who wish to assign or sublet space, including:
- Marketability of some properties; this could potentially make it impossible unless the properties 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.
- Valuations of properties could be affected if their marketability suffers.
- Rent reviews for properties in this situation could also be affected with greater leverage for negotiations available to the tenant
Owners and occupiers will need to assess the costs and viability of undertaking retrofits or refurbishments against the marketability of their property as it currently stands.
Trading Standards Officers will enforce the rules for commercial properties.
Exemptions:
You don’t need an Energy Performance Certificate (EPC) if you can demonstrate that the building is any of these:
- listed or officially protected and the minimum energy performance requirements would unacceptably alter it
- a temporary building only going to be used for 2 years or less
- used as a place of worship or for other religious activities
- an industrial site, workshop or non-residential agricultural building that doesn’t use much energy
- a detached building with a total floor space under 50 square metres
- due to be demolished by the seller or landlord and they have all the relevant planning and conservation consents
- vacant buildings and demolition.
A building is also exempt if all of the following are true:
- it’s due to be sold or rented out with vacant possession
- it’s suitable for demolition and the site could be redeveloped
- the buyer or tenant has applied for planning permission to demolish it
Complying with this new regulation will mean assessing your energy usage and gaining a certificate that proves you meet the new requirements.