From 1 October 2008 energy performance certificates will be needed on the construction, sale or letting of almost all commercial premises. Large buildings are caught by the regulations from 6 April 2008. How does that affect you as a landlord?

Which buildings are caught from April? Commercial buildings with a useful (not defined in the regulations) floor area of over 10,000 square metres but, from 1 July 2008 buildings with a useful floor area of over 2,500 square metres will be caught.

Which buildings are totally exempt?

  • buildings that are going to be demolished,
  • places of worship,
  • temporary buildings to be used for 2 years or less and
  • industrial sites, workshops and non-residential agricultural buildings with a low energy demand (not defined again).
  • very small buildings (under 50 square metres)

What does the landlord have to do? Produce, free of charge, an energy performance certificate and report of recommendations to improve energy performance. These must be prepared by an accredited assessor.

When does the landlord have to do this? On a sale or letting of the building; on the earliest of the following:

  • when a person makes an offer (verbally or in writing) to take the building
  • when a person requests information or a viewing to help them decide whether to make an offer.

Who does the landlord have to supply the certificate and report to? Every genuine prospective tenant (or buyer) who makes an offer, requests information or a viewing.

What if the landlord doesn’t comply? For up to 6 months from the failure to comply, the landlord could receive a penalty notice from the Trading Standards Officer and the charge would be 12.5% of rateable value.

If the landlord has a multi let building and is letting one unit is the unit or building assessed? The regulations are not clear but we think it will be the whole building if there are common services.

Who pays for the certificate and report? The landlord and in some cases it will be difficult to recover costs under the existing service charge so new leases need to be amended.

Does a landlord have to provide them when the occupational tenants are assigning or sub-letting? No they do but the landlord has to co-operate with them and give them access when they need it.

Does a landlord have to provide the certificate and report on a lease renewal? Yes although it is not really clear when!

How long does the certificate last? 10 years if no works are done that change the lettable areas or modify any of the services to the building. In that case, then you need a new certificate and report. Tenant’s alterations may directly affect the certificate from October. Again new leases need to cover this.

Do landlords have to have these certificates on display? No only public buildings over 1,000 square metres are going to have to display energy information.