Selling or letting a commercial or residential property? If you don't produce an energy performance certificate (EPC) you could be fined.
Everyone selling or letting a commercial or residential property must, in most circumstances, supply an EPC to the buyer or tenant. Public bodies must also display a "display energy certificate" at their buildings.
EPC required on sale or letting
Whenever a building, or a self-contained part of a building, is to be sold or let, the seller or landlord must make available (free of charge) a copy of a valid EPC to any prospective buyer or tenant at the earliest opportunity.
Selling or letting a multi-occupied building as a whole
An EPC can be prepared for the building as a whole (save that every dwelling comprising a part of the building must have its own EPC).
An EPC can be prepared for each and every separate part of the building.
Selling or letting a part of a multioccupied building WITH a common heating system
The EPC can be prepared for the building as a whole (save that every dwelling comprising a part of the building must have its own EPC).
An EPC can be prepared for the particular part being sold or let.
Selling or letting a part of a multioccupied building WITHOUT a common heating system
The EPC must be prepared for the particular part being sold or let.
EPCs required on construction or modification
Where a building is:
- constructed; or
- subdivided into more or fewer parts for separate use
the person who is responsible for carrying out the work must, no later than five days after the work has been completed:
- give an EPC to the owner of the building; and
- notify the local building control department of the local authority that this has been done.
The building control department will not issue a certificate of completion until they are satisfied that the EPC has been issued.
For commercial buildings (or self-contained parts of a building):
- over 10,000 square metres which have been on the market continuously since 6 April 2008;
- over 2,500 square metres which have been on the market continuously since 1 July 2008; or
- of 2,500 square metres or less which have been on the market continuously since 1 October 2008
the seller or landlord must hand over an EPC as soon as reasonably practicable following exchange and, in any event, no later than 4 January 2009.
An EPC is NOT required for the sale or letting of the following:
- a building or parts of a building that does NOT have (nor is to be fitted out with) heating, mechanical ventilation or air conditioning to condition the indoor climate (so long as it does not front a conditioned concourse or mall);
- a temporary building or part of a temporary building with low energy demand and a planned time of use of two years or less;
- an industrial site or workshop with low energy demand;
- a non-residential agricultural building with low energy demand;
- a standalone (i.e. detached), non-residential building (such as a kiosk on the concourse of a railway station or shopping centre) with a gross floor area of less than 50 square metres;
- a part of a building which is not self-contained (e.g. a bedroom in a house with a shared kitchen and bathroom);
- (subject to certain conditions) a building being sold for demolition;
- a building used primarily as a place of worship.
An EPC is NOT required for the following transactions:
- the grant of a licence (as opposed to a tenancy);
- lease renewal;
- lease surrender;
- compulsory purchase;
- share sales.
The government have said that there may be other types of not-for-value transaction that might be excepted, but that this will depend on the individual circumstances of any case.
Validity of EPCs
An EPC must be issued by an energy assessor, who must be a member of an approved accreditation scheme.
An EPC must have been issued no more than 10 years before the date on which it is made available (save where a HIP is required, in which case the EPC must have been issued no earlier than the date 12 months before the first point of marketing).
Where there is more than one EPC for a particular building, only the most recent will be valid.
Duty to co-operate
It is the duty of every person with an interest in a building to co-operate with a seller or landlord to make an EPC available, including giving access to the energy assessor.
Registration of EPCs
Each EPC (other than for a dwelling) must be registered by the energy assessor on the national register.
The EPC is then given a unique reference number. Only those who know the unique reference number will be able to view the EPC on the register and obtain a copy.
Penalties for not providing an EPC
Local trading standards departments are responsible for enforcing the requirements to provide EPCs. Failure to provide an EPC when required by the regulations means you may be liable to a civil penalty charge notice.
The penalty is 12.5 per cent of the rateable value of the building, with a default penalty of £750 where the formula cannot be applied. The minimum penalty is £500. The maximum is £5000.
You have a defence against a penalty charge notice if you:
- commissioned an EPC at least 14 days before it was required; and
- (despite "all reasonable efforts") did not receive it in time from the energy assessor.
A landlord (but not a seller) also has a defence if:
- the tenant needed to relocate urgently as a result of an emergency;
- there was insufficient time to obtain an EPC before granting the lease; and
- an EPC is provided as soon as reasonably practicable after completion.
Requirement to display a "display energy certificate"
Any public authority (or other institution providing public services) occupying a building frequently visited by large numbers of the public with a gross floor area over 1000 square metres must:
- hold an advisory report issued by an energy assessor; and
- display at all times a display energy certificate.
Display energy certificates are valid for 12 months.
Advisory reports are valid for seven years.
There are transitional arrangements for buildings on a single site or campus.