The law surrounding Energy Performance Certificates (EPCs) is changing, and EPCs must now be provided at an earlier stage than before. The changes in law are particularly relevant to landlords, owners of property and their agents.
Under the current law, an EPC must be commissioned before the contract to sell or to lease the property is entered into, or (if sooner) whenever the interested purchaser/tenant views the property or is provided with information regarding the property. Where an EPC has been commissioned but is not yet available, the relevant person has 28 days after marketing to obtain an EPC using ‘reasonable efforts’.
The current law defines a building that would require an EPC as "a roofed construction having walls, for which energy is used to condition the indoor climate." This would include buildings that have fixed heating, mechanical ventilation or air conditioning. The current rules are stricter for residential properties, as a residential property cannot be put on the market unless it has an EPC.
However, under the current law, it has been argued that an EPC could be delayed until shortly before the party enters into a sale contract or a lease. The new law clarifies the position, and makes it clear that this delay is not permitted.
It is currently the responsibility of the seller to make an EPC available to prospective buyers. In the same way, as soon as a building is in the process of being offered to let, it is the responsibility of the prospective landlord to make an EPC available to prospective tenants.
The new legislation is being implemented in the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2011 (SI 2011/2452). Under these regulations, the seller or landlord will need to commission an EPC before marketing a property. There can be no delay in producing the EPC, unlike under the current law.
Furthermore, this duty will be extended to the sale and rent of residential and non-residential buildings.
In addition, from April 2012 the 28 day period allowed to commission an EPC will be reduced to a period of seven days after marketing the building. However, if after seven days the EPC has not been secured, the relevant person will have a further 21 days in which to secure it, after which penalty charges may be imposed.
Once an EPC has been obtained, a person providing written particulars for the sale of residential property must also ensure that the particulars include the full first page of the EPC. This requirement again will apply to all buildings. Crucially, it will not be possible to include the asset rating only. Agents must take particular care here, as often it will be an agent who provides this information, and will be liable if the EPC front page is not disclosed.
Both owners and their agents should be aware of the changes in the law, as from 6 April 2012, the owner of the property will not be the only one to be held liable for failure to comply with the new law. If a person is acting on behalf of the owner, they have an obligation to check that the EPC has been commissioned before marketing the property, An agent must therefore have evidence of this, as enforcement officers now have the power to require an agent or owner to produce a copy of an EPC.
If this is not complied with, an enforcement officer can issue a Penalty Notice. A Penalty Notice can from be a minimum fine of £500 to a maximum fine of £5,000.
Air Conditioning Reports
A further change is that, if an air-conditioning inspection report is required, this will need to be lodged onto the central EPC register. A fee can be charged for lodging an inspection report on the register. An air conditioning report will be required if the air condition system is above 12 kW, and must also be inspected every 5 years.
It is important to note that any properties marketed before 6 April 2012 will continue to enjoy the longer time periods for compliance, but any marketed after this date must comply with the new time frames.
These new changes make the law surrounding the marketing of properties clearer, but also stricter. Agents and owners should ensure that an EPC is obtained before marketing the property, as enforcement officers can now ask to see an EPC and can enforce penalties against an owner or agent if one is not produced.