‘Raising energy efficiency standards or an unnecessary expense?’
Although Energy Performance Certificates (EPCs) are familiar to sellers of residential property as part of Home Information Packs (HIPs), their impact on commercial properties has been less well publicised.
An EPC contains certain information about the energy efficiency of the building, including an asset rating indicating the energy performance of the fabric of the building. Assessments are carried out by an accredited assessor, who produces the certificate and provides a recommendation report containing suggestions for improving energy efficiency. The certificates are valid for 10 years. A seller or landlord is either now, or shortly will be, obliged to provide any prospective buyer or tenant with a valid EPC free of charge when giving other information such as title documents.
Originally, EPCs were intended to be compulsory from October 2007. Amid real concerns that there would be too few inspectors to carry out assessments, the timetable for implementation was pushed back until April 2008. Essentially, the revised timetable is:
- 6 April 2008 - EPCs now required on the construction, sale or letting of commercial buildings with a floor area of over 10,000 square metres.
- 1 July 2008 – EPCs required on the construction, sale or letting of commercial buildings with a floor area of over 2,500 square metres
- 1 October 2008 - EPCs will be required on the construction, sale or letting of all remaining commercial buildings (whether selling/letting the whole or part of the building). Small non-residential buildings (of less than 50 square metres) are exempt.
The cost of producing an EPC will be dependent on the size of the building, but costs in the region of £4,000 + VAT are being suggested for a 50,000sq ft office building.
There will be penalties for failing to comply with the legislation, which in most cases will be linked to 12.5% of the rateable value of the building or a basic penalty of £750 where it is not possible to apply the formula.
The Government’s explanatory memorandum which accompanied the new legislation states that: “Over time, most people and businesses will be affected by the requirement for EPCs, either as property owners when they come to sell or let their property or as occupiers when they decide to buy or rent a building.” This is certainly true, but whether the introduction of EPCs will make any impact on carbon emissions and, indeed, property values remains to be seen.
This article was first published in NewsBrief, Summer 2008
For more information or advice on Energy Performance Certificates and commercial property, please contact either Jennie Cuthill or Ellie Crofts
