The Energy Performance Certificate (EPC) regime can be hard to keep up with as the regulations and guidance are frequently updated. In spite of this, it is very important for pharmacists to be aware of their obligations under the regime, to avoid falling foul of penalties.
An EPC is a certificate containing information about the energy efficiency of a building. EPCs together with the attached required recommendation report (containing suggestions for the improvement of energy efficiency) can be used by buyers/tenants to aid the decision on whether or not to purchase/lease a property.
WHEN DO YOU NEED TO HAVE ONE
Broadly speaking, it is a requirement to have an EPC in any of the following circumstances:
- you rent out or sell premises (but not where there is no change in the legal owner of the property; for example a lease renewal or lease surrender)
- a building under construction is finished
- there are changes to the number of parts in a building used for separate occupation and the changes involve providing or extending fixed heating, air condition or mechanical ventilation systems.
It is now well established that an EPC must be commissioned before marketing buildings - residential or commercial - for sale or rent. The definition of “Building” has been in flux, but since the 2012 EPC Regulations is taken to include a “Building Unit”, meaning a section, floor or apartment within a building which is designed or altered to be used separately.
The 2012 Regulations brought a number of changes to the regime, which were intended to reduce red tape and compliance costs. Inadvertently, though, things were to some extent made more complex.
Unfortunately, one issue the 2012 Regulations did not clarify was whether an EPC for one part of a building could be invalidated by the subsequent issue of an EPC for another part (sometimes known as “trumping”).
The peculiarity of trumping stems from the rule that an EPC lasts 10 years or (if earlier) until the issue of a newer one. As a result of the confusion, and to avoid undue expense, well advised landlords will often insert wording in the lease to prevent tenants from commissioning their own EPCs.
REQUIREMENT TO DISPLAY
The 2012 Regulations introduced a £500 penalty for failure to display a valid EPC in commercial buildings which are frequently visited by the public and have a floor area of more than 500 square metres. The EPC must be displayed in a prominent place clearly visible to members of the public who visit the building.
This display requirement seems unlikely to affect most pharmacies due to the size threshold. However, it would apply to a large building like a shopping centre where one of the discrete units is big enough to qualify. In that instance, the Regulations do not explain who would be obliged to display a certificate. The risk is that the onus is on each separate business unit owner.
A pharmacist operating within a large health centre would be well advised to check with the landlord whether an EPC is available (the display requirement only applies if one is) and, to err on the side of caution, should consider displaying it to avoid sanction.
You don’t need an 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
The penalty for failing to make a commercial EPC available to any prospective buyer or tenant when selling or letting non-dwellings is fixed, in most cases, at 12.5 per cent of the rateable value of the building, with a default penalty of £750 where the formula cannot be applied. The range of penalties under this formula are set with a minimum of £500 and capped at a maximum of £5,000.
Trading Standards Officers are being given increased powers to force landlords or agents acting on their behalf to prove that an EPC has been commissioned and can issue a penalty notice if the evidence is not provided within 7 days
The 2015 EPC Regulations recently came into force, setting the standard for the minimum EPC rating (level E) which will be required from April 2018 onwards.
The new regulations also aim to simplify some of the confusion around compliance with the EPC regime – for example by making the duty to have air conditioning systems inspected more straightforward.
Affected pharmacists can now begin to strategize about how to best manage the EPC risk in their property or portfolio.
This article was originally published in PharmacyBusiness, October 2015.