Energy Performance Certificate (EPC)
The European Union introduced the Energy Performance of Buildings Directive (EPBD) in 2003. The UK Government followed with the Energy Performance of Buildings (Certificates and Inspections) Regulation in 2007. Commercial buildings contribute 20% of the UK’s carbon footprint. EPCs are part of a series of legislation to dramatically improve the energy efficiency of the UK’s commercial building stock, both new and existing.
The requirement for an EPC for buildings placed on the market for sale or rent came into force from August 2007 for domestic and October 2008 for commercial buildings. Newly constructed buildings require an EPC before completion can take place. There is a common misconception that an EPC is only mandatory when the property is placed ‘under offer’ but the regulations actually require that an EPC be in place from the first day the building is marketed. An EPC is valid for 10 years and is available for public view on the UK Government’s Landmark database.
An EPC is a measure of the theoretical energy performance capability of a building. The energy rating is expressed from A to G on a colour coded bar chart. The rating is based on the CO2 emissions of the building, factoring in the building’s construction fabric and heating, cooling and lighting services. A report of recommendations accompanies the certificate and sets out proposals to improve the energy efficiency of the building with short, medium and long payback periods.
The legal responsibility to have an EPC lies with the organisation that has placed the building on the market, for example the landlord, managing agent or tenant intending to sublet. The marketing agent also has a legal responsibility to have EPCs in place for the buildings they are advertising. With regard to multi-let buildings, the landlord can choose to have an EPC for only the part being marketed or for the whole building as long as the building has a common, centralised heating system. Otherwise each demised space would need to be assessed individually. An EPC can be reused for the up to 10 years if the area it covers is includes the area to be sold or let.
EPCs are not required for:
- Lease renewals or extensions to existing tenants.
- Compulsory Purchase Orders
- Lease surrenders
- Sales of shares in a company where the building remains in company ownership
- Exempt buildings
Buildings that are exempt from the requirement for an EPC include:
- Places of worship
- Temporary buildings with a planned use of less than two years.
- Detached, self-contained buildings less than 50 sq m
- Industrial and agricultural buildings without any heating and where it would not be expected to be installed.
- Buildings due for demolition. Proof is required including vacant possession and intent such as a signed demolition contract or planning permission.
The penalty for non-compliance if the building is being marketed is 12.5% of the Rateable Value, subject to a minimum of £500 and a maximum of £5,000. The Regulations are enforced by local Trading Standards officers who can request proof that an EPC is in place at any time. The penalty is repeated every 28 days if an EPC is still not arranged.
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