Introduction

As part of an EU Directive which ties in with the Government’s drive to cut carbon emissions from buildings there are Regulations coming into force making the inspection of air conditioning systems compulsory. The same Regulations that require most buildings to have an energy performance certificate (EPC) on construction, sale and letting also include the obligations to inspect air-conditioning systems on a regular basis and this alert summarises how it is all going to work, in theory, from the end of this year.

Obligations

What is the basic obligation? Whilst not coming into force immediately, the basic obligation will be a duty on each person who controls the operation of an air conditioning system to have that system inspected by an accredited energy assessor at least once every 5 years. This applies to all systems with an effective rated output over 12kW. A copy of that inspection report must be kept by the system operator and handed over to the new system operator when the property changes hands.

Who is the person controlling the air conditioning system? This will be the person with the power to control the temperature of the units in that system. So this will affect many occupiers of properties. Some landlords of let properties will have control of the temperature and landlords of vacant properties with air conditioning systems will be responsible for complying.

If the air conditioning is not a linked system but is done by individual units, is each unit caught? What the Regulations say is that where one person has the power to control individual units in a building, each unit is deemed to be part of a single air conditioning system for that building. It appears that individual units outputs will need to be added together to see if they total more than the 12kW limit. We do not know yet how hard that will be to interpret in practice.

How is the 12kW output measured? The definition is that it is the maximum calorific output specified and guaranteed by the manufacturer of the system as being deliverable during continuous operation whilst complying with the manufacturers indicated useful efficiency. It sounds to us as though some occupiers could need assistance even working out if they fall within the Regulations.

Who can do the assessments? It will have to be an accredited assessor. The Government are saying that in house staff can become accredited so large corporate occupiers might want to get a member of staff accredited rather than employ outside consultants. What does the inspection achieve? The inspection has to be followed by a written report prepared by the assessor assessing the efficiency of the system, its size compared to the size of the building and advice on improvements, replacement and alternatives. The Government must be expecting or hoping that occupiers will be persuaded to make improvements to their air conditioning after reading their reports but they are not obliged to! The same is true of EPCs. If improvements are made, there is no obligation to get a new report.

When do the first inspections need to be done? Like EPCs the requirements are being phased in. Older and bigger systems are subject to the Regulations first

  • Any system with an output under the 12kW figure does not have to be inspected under • these Regulations.
  • If the system has an effective rated output above 250kW and it was first put into service • before 1 January 2008 it will need to have its first inspection before 4 January 2009 and looking at the calendar and allowing for holidays that is, in reality, going to be before Christmas this year. Think about employing an expert in plenty of time.
  • If the system pre-dates 1 January 2008 but only has an effective rated output of less than 250kW then it will not be caught by the Regulations until 4 January 2011.
  • Any newer systems i.e. first in service after 1 January 2008 only have to be inspected 5 • years after being put into service.

Is it possible to buy a building or take a lease without an inspection report? Yes but within three months of completion the new controller of the air conditioning will have to obtain an inspection report. Investor landlords who are not taking over control of the air conditioning will not, therefore, have to comply.

What is the enforcement process? This will mirror EPCs with local authority trading standards officers issuing penalty notices for up to 6 months after the breach and this will lead to fines of £300 each for:

  • failing to inspect,
  • failing to keep the report,
  • failing to hand it over or
  • failing to obtain one on acquiring the property where it was not supplied by the previous • operator of the system.

What is the situation in commercial leases? The answer will depend on who controls the system:

  • If the tenant controls the system (and many will) then the tenant will have to comply and • most leases contain a tenant’s covenant to comply with statute. The report will not automatically be available for a landlord but will have to be handed to the landlord if the lease comes to an end. It has to be passed on by the tenant to any assignee or undertenant.
  • If the system is in the landlord’s control e.g. a multi-let building where the landlord • controls the temperature then the landlord will have to comply. Most service charges will allow a landlord to recover the costs of complying with regulations like these so tenants will pay for it in the service charge (but do not get to see the report).

Conclusions

Many companies will want to avoid a last minute rush to comply when assessors may be scarce (and more expensive). Having done so they can take time to consider the contents of the reports and decide on the shade of green (and the costs and savings) suitable for them and any improvements they will make.

These Regulations apply in addition to the Regulations for the inspection of some air conditioning systems that use fluorinated gases. The Government are proposing legislation that will start mandatory carbon emissions trading for big businesses such as retailers, banks and hotel operators (not just for energy intensive businesses) as part of the Government’s carbon reduction commitment. The current trend of putting environmental compliance burdens on the property sector will continue.