Following recent consultation, the Scottish Government has confirmed the timetable for the publication and implementation of regulations to be made under section 63 of the Climate Change (Scotland) Act 2009.

Background

As part of the Scottish Government's on-going commitment to reduce emissions, Section 63 of The Climate Change (Scotland) Act 2009 provides for regulations to be made for: (1) the assessment of the energy performance of existing non-domestic buildings and greenhouse gas emissions from such buildings; and (2) building owners to take steps to improve the energy performance of, and reduce emissions from, such buildings. Following the consultation period, draft regulations implementing the provisions of Section 63 are expected to be laid in the Scottish Parliament this Summer, with proposed implementation in Summer 2016.

What will the forthcoming regulations require?

It is currently proposed that the new regulations will initially apply only in the event of a sale or the lease of the whole (or part) of larger buildings (ie those with a floor area of 1,000 m² or more) which are already subject to the requirement to provide an Energy Performance Certificate (EPC).

The Scottish Government has indicated that the regulations will provide that the owner of a building which is subject to the regulations must, after obtaining an EPC (whether in the case of a sale or lease) undertake a further assessment to identify a target for improvement of the carbon and energy performance of the building and then identify, in what is called an ‘action plan’, how this target would be met through physical improvements to the property.

Once an action plan is agreed the owner will be able to choose to defer the timetable for the physical improvements by arranging to record and report operational energy ratings (recording actual metered energy use via a Display Energy Certificate (DEC), reported on an annual basis). Where the owner chooses to improve, a period of 3.5 years is allowed to do the physical work. This period has been chosen as it corresponds to the current duration of a building warrant plus six months planning time. It is expected that local authorities will be responsible for enforcement of the regulations, and will have power to impose penalty charges for failure to comply.

As is the case with an EPC, the action plan, which identifies improvement targets, a proposed workplan and any decision to report operational energy use, must be made available to prospective buyers or tenants. Provision of this information is required to enable marketing of the property.

Although building owners will be ultimately responsible for implementation of the works under an action plan, who will carry out and/or pay for the works could be the subject of negotiation during commercial transactions. Similarly, it is important for landlords to think about reserving rights to carry out such works (and perhaps ensuring that such works are taken into account at rent review) in any new leases being entered into now (notwithstanding that the regulations are not yet in force).

The proposed timetable for implementation of the regulations is set out below.

Implementation table

Click here to view timetable.