Significant changes have been made to legal requirements to provide up-front information about the energy performance rating of buildings for sale or for rent. The changes have implications, in particular, for property agents and owners who are advertising buildings for sale or rent.

The pre-change position has been that an energy performance certificate (EPC) for a building should be made available to a prospective buyer or tenant, free of charge. However, exactly when that information should be made available has been, at best, vague. In some cases EPCs are therefore being provided only as a purchase or lease transaction progresses, sometimes only once the sale or lease has been completed, and, occasionally, not at all.

Key changes

This will change on 9 January 2013. From that date, if a building or part of a building for sale or let is advertised in a newspaper or a magazine, in an advertisement transmitted electronically, including by means of the internet, or by way of written particulars, all those forms of advertising must clearly state the energy performance rating of the property.

Also from 9 January 2013, a recommendations report will have to be made available to prospective purchasers and tenants. That report must include more detailed information on the cost effectiveness of the recommendations for improvement made in the EPC to which it relates.

Together, these measures are designed to ensure that property owners wishing to sell or let buildings are complying with the requirement to obtain EPCs in good time in advance of a sale or let. Prospective buyers and tenants, meanwhile, will have more information on which to base their decisions on value and suitability.

Comment

A requirement to make explicit, at the marketing stage, that a property has a poor or average energy performance rating, and also to make explicit the extent of requirements to improve the rating, may have an adverse impact on the value or marketability of some properties. In the current economic climate, property owners may be reluctant to expend substantial sums securing an upgrade of energy performance ratings in advance of a sale or let and so it will be interesting to see what effect these new measures have on buildings coming to market.

Note: The new requirements do not apply to renewals of leases to existing tenants.

Penalties will be possible for owners who fail to comply with the new requirements. Note that it is the owner who is primarily liable, although the advertisement of the property may be contracted to someone else.

For the amending legislation, please visit legislation.gov.uk here and here.