Energy Performance Certificates extend to business properties

Thousands of firms will soon have to provide Energy Performance Certificates (EPCs) when they build, sell or rent out flats and commercial properties.

The certificates will be much the same as those now required as part of a Home Information Pack when selling a house. They rate a property’s energy efficiency by giving it a grade from A to G. A is the most efficient and G is the least.

From 6th April, EPCs will be required for all new homes being built and also for the construction, sale or rent of commercial properties with a floor area of more than 10,000sq metres. From 1st July, the threshold will be reduced to 2,500sq metres and from October the regulations will be extended to apply to all remaining buildings apart from a few minor exceptions.

The measures are being introduced to comply with the EU Energy Performance of Buildings Directive (EPBD). The Government says that nearly 50% of the UK’s energy consumption arises from heating and lighting buildings. It believes that even minor improvements in the energy efficiency of our 25 million buildings would have a significant impact and help us to meet our targets to reduce carbon emissions.

The changes will place new responsibilities on anyone constructing a new building or selling or renting out an existing property.

For example, when a new building is completed, the person responsible for the construction will need to obtain a certificate and provide it to the owner. This is obligatory under Building Regulations. The same thing applies if a building is converted into more or fewer units and there are changes to the heating and hot water provision or to the air conditioning system.

When selling an existing building, the owner will have to provide a certificate for all prospective buyers. Landlords will have to do the same for prospective tenants of commercial properties. However, there is no need to provide a certificate for an existing tenancy; only for a new one. Commercial property certificates are valid for 10 years and if they are still in date when a tenancy changes there is no need to obtain a new one. The regulations will be extended to landlords renting out homes from 1st October.

The certificates have to be provided by energy assessors who are accredited and registered with a government approved scheme. The energy assessments are carried out using standard methods making standard assumptions about energy usage so there can be consistency when comparing the energy efficiency of different buildings. It allows prospective buyers, tenants and occupiers to make energy efficiency and potential carbon emissions a factor when deciding which property to choose.

The Energy Performance Certificates should not be confused with Display Energy Certificates (DECs) which show the actual amount of energy being used in a building. They will be required from 1st October for buildings over 1000sq metres occupied by a public authority or an institution that provides a service to a large number of people. The certificates have to be displayed in a prominent place where the public will be able to see them easily. The Government may consult on whether to extend DECs to buildings occupied by commercial organisations but has not done so yet.

Some buildings are exempt from the regulations but not many. EPCs will not be required for places of worship, stand alone buildings of less than 50sq metres (except for homes), temporary buildings which won’t be used for more than two years and buildings with a low energy demand such as barns and farm outbuildings. In some circumstances, buildings due to be demolished may be exempted.

Understandably, many people regard the new regulations as yet another administrative burden. For others, however, they are an opportunity to improve their chances of selling or renting out a property by making it more energy efficient and so more attractive to prospective buyers and tenants.

Whichever view one takes, there is no escaping to the need to comply.