Energy Performance Certificates

From the  6th April it will be necessary to provide an Energy Performance Certificate (EPC) whenever you sell or let a Commercial Property.

There is a phased timetable for implementation. 

An EPC will be required from 6 April 2008 for a commercial building of more than 10,000 sq metres, from 1st July 2008 for a commercial building of more than 2,500 sq metres and from 1st October 2008 for all other commercial buildings (with a few exceptions).  Once obtained the Certificate is valid for 10 years.

The Certificate grades the performance of the Building on a “fridge rating basis” and further provides suggestions on how the energy efficiency of the Building could be improved.  At this stage there is no requirement to follow any of the recommendations but in order for the Government to comply with more and more stringent EU Directives regarding carbon emissions expect this to change.

The guidelines state that a valid report must be made available “free of charge” by the Seller or the Landlord to a prospective Buyer or Tenant at the earliest opportunity (which must at the very least be before entering into any Contract for the  Sale or Letting of the Property).

The cost of the EPC is likely to vary but could be substantial where the size of the property is large.  There is currently much debate on whether the cost of the EPC could be recovered through the service charge for a multi-let building.  It is likely to fall on the construction of the service charge provisions of the individual Lease but in many instances especially for vacant or single let units providing an EPC will be an additional expense for the Owner.

Failure to comply with the Regulations may result in a fine enforceable by the Trading Standards Authority. 

Whilst introduction of EPCs is undoubtedly well meaning the muddle and confusion experienced in the residential market by the introduction of HIPs is now likely to extend to the Commercial Property sector (not least because of a huge shortage of Inspectors).

Neil Belcher
Associate
Spratt Endicott Solicitors