On 19 September 2012, the Czech parliament overruled a presidential veto and passed an amendment to Act No. 406/2000 Coll., on energy management (the “Amendment”). Effective 1 January 2013, the Amendment imposes additional obligations on builders of new buildings, as well as on owners of certain buildings already in use, including the obligation to have an energy performance certificate (“EPC”) issued. This article outlines the major changes in the energy management regulation and the new obligations that they entail.

The Amendment operates with new terms mostly introduced to the Czech legal system by a European directive. The energy performance of buildings, for instance, constitutes the amount of energy necessary for covering the consumption in a building. The total energy-referential surface is the exterior surface of all spaces in the building with an adjusted interior environment, defined through the exterior surfaces of the construction of the building’s covering, or more simply, it constitutes the surface of all spaces in the building including the external walls (the “surface area”).

Energy performance requirements for buildings

Effective 1 January 2013, when applying for a building permit, builders of new buildings must comply with energy performance requirements stated in a respective implementing regulation to Act No. 406/2000 Coll. at an optimal level. As of 1 January 2018, the energy performance requirements shall become more restrictive for buildings with a surface area of more than 1,500 sq.m. After 1 January 2020, only buildings complying with the energy performance requirements of the nearly zero level (“nearly zero energy buildings”) will be permitted.

Compliance with the energy performance requirements of the respective level is to be proven by a positive binding opinion of the State energy inspection and the EPC submitted with the application form when applying for a building permit. This obligation also binds the owners of completed buildings undergoing major reconstruction, which is defined as a change of a completed building affecting more than 25% of all external walls of the building.

In contrast, buildings with a surface area of less than 50 sq.m., buildings which are considered part of the cultural heritage, buildings used for religious purposes, vacation homes and industrial or agricultural buildings with annual energy consumption up to 700 GJ are exempt from the above energy performance requirements and hence the need for the EPC.

Energy performance certificate

The Amendment imposes a new obligation on the owners of completed residential and administrative buildings already in use. As of 1 January 2015, the owners of such buildings are obliged to ensure the EPC. The Amendment sets later terms for fulfilment of the above-stated obligations in relation to the surface area of a building. At the latest by 1 January 2019, all completed residential and administrative buildings are required to have the EPC.

Furthermore, the building owner must ensure the EPC prior to any purchase or lease of a whole building or any purchase of building’s compact parts (residential or nonresidential premises) as of 1 January 2013. After 1 January 2016, even the lease of residential or non-residential premises shall be subject to the obligation and the of the lease agreement.

With regard to the purchase and lease of the building or its compact parts, the owner is obliged to ensure the EPC, submit the EPC to all potential buyers before the conclusion of the contract and hand over the EPC to the buyer at the latest by the conclusion of the contract. If publishing any information or marketing materials with respect to the purchase or lease of the building or its compact parts, the owner of the building is obliged to include the data from the EPC. The owners of buildings with a surface area less than 50 sq.m., buildings used for religious purposes, industrial and agricultural buildings with annual energy consumption up to 700 GJ and vacation homes are exempted from the regulation.

The EPC shall indicate the building’s energy performance on a scale of A to G, making the information on expected energy consumption in the building accessible to potential buyers or tenants. It expires within ten years at the most or as soon as the building undergoes major reconstruction.

In the case of new buildings as well as completed buildings undergoing major reconstruction with an installed energy source with performance over 200 kW, an energy opinion constitutes part of the EPC (the “opinion”). The opinion assesses the technical, economic and ecological practicability of alternative systems of energy supply. The opinion can also be issued separately in cases that are specified in the Amendment.

The EPCs are to be elaborated and issued exclusively by energy experts authorised and listed by the Ministry of Industry and Trade. The list of experts will be available on the website of the Ministry. Due to increased demand of the EPCs at the beginning of next year, a significant increase in price for elaboration and issuance of the EPC can be expected.

Energy audit

The owner is required to ensure an energy audit for the building if the average annual consumption of energy in the period of the last two years exceeds the values stated in the implementing regulation, or if the owner carried out major reconstruction of a completed building which does not comply with the energy performance requirements stated in the implementing regulation. If the annual heat consumption in the building complies with the requirements set out in the regulation, the owner is exempt from the obligation.

The content and extent of the audit, as well as the manner in which it will proceed, is set out in the implementing regulation. It can only be processed by the expert. The audit is valid until the next major reconstruction of the building.

Installation of heat regulation and measuring devices

The Amendment further regulates the obligation on the part of building owners to install devices on interior heat installations that would regulate and measure heat consumption by end consumers, e.g. the tenants (“meters”). This obligation does not apply to residential houses, vacation homes or non-residential premises provided that the limits stated in the implementing regulation are not exceeded (compliance with the limits shall be proved by the opinion).

Fines

Building owners should take time to familiarise themselves with the new regulations, since the fines introduced by the Amendment are rather high.

The upper threshold of the fine for breaching any of the above obligations is CZK 100,000 (approx. EUR 4,000) for natural persons and CZK 5 million (approx. EUR 200,000) for legal entities.