Energy performance certificates ('EPCs') were first introduced in 2007 in England and Wales as part of the EU and Government's aims of tackling climate change and reducing emissions by promoting energy efficiency in buildings. They contain information about the energy efficiency of buildings and must be produced whenever a building (commercial or residential) is constructed, sold or rented out.
The law in relation to EPCs has been in an almost constant state of flux since 2007, and the most recent changes, which came into force on 9 January 2013 via the 2012 EPC Regulations, have created further uncertainty. In this article, Lucy York, Commercial Property Solicitor, highlights some of the most recent changes.
The list of buildings that do not require an EPC on construction, sale or renting has been widened by the 2012 EPC Regulations, for example:
It is thought that listed buildings will be exempt from the requirement to produce an EPC on sale or renting. Critics have said that this is a backwards step in terms of the Government's 'Green Deal', however others feel that whilst people remain confused by the ambiguous jargon (for example it is not clear what qualifies as 'officially protected as part of a designated environment') very little will change.
Previously EPCs were not required on construction, sale or rent of buildings which were used primarily or solely as places of worship. This has been softened, so that the exemption now applies to buildings used as a place of worship or for religious activities.
There was an exemption in relation to stand-alone buildings which were not dwellings with a total useful floor area of less than 50 square metres. This exemption has now been extended to cover dwellings.
Previously a copy of the first page of the EPC had to be attached to written particulars for any buildings available for sale or rent. This requirement has been abolished and, in a move which has been heavily criticised by estate agents nationwide, the 2012 EPC Regulations have introduced a new obligation whereby property advertisements must now include details of energy performance certificate ratings where they are available. It is clear that the requirement only applies where the building has a valid EPC, however it is less certain whether stating the 'A to G' rating alone will suffice, or whether the full graph and/or the precise numeric figure for the energy efficiency rating is required. Further, the scope of the new requirement has been questioned; is a 'for sale' note posted in a newsagent's window or via social media caught?
Double whammy for large commercial buildings?
The requirement for a display energy certificate ('DECs') in large public buildings with useful floor area of over 1,000 square metres has been extended to large public buildings with over 500 square metres of useful floor area, and will drop again to cover those with over 250 square metres from 9 July 2015. However the compliance burden is lessened as the building in question must be occupied by a public authority and must be visited frequently by members of the public; under the previous system it was thought that if either of these elements were satisfied, the requirement would be triggered.
The 2012 EPC Regulations have introduced a brand new obligation. Where they have been provided, EPCs must now be displayed in large (where the total useful floor area is over 500 square metres) non-residential buildings that are frequently visited by the public, such as shops and restaurants. The obligation may mean that tenant occupiers have to check (for example with their landlord, former landlords and on the EPC register online) whether an EPC has been issued previously.
Whilst the recent changes have done little to resolve the uncertainties regarding the EPC regime, it is clear that to ignore the regulations would be foolish. Breaches can attract penalties, for example the maximum penalty for failing to provide an EPC when selling or renting out a commercial property is a fine of £5,000. Guidance issued by the Department of Communities and Local Government is available online.