An Energy Performance Certificate (EPC) is a document that provides information about the energy efficiency, running costs and environmental impact of a building. In order to produce an EPC, a site survey is carried out by an accredited energy assessor who inspects and collects information on many aspects of a building which affect the rating, these include: build date, construction materials, HVAC (Heating, Ventilation and Cooling), hot water heating, lighting, insulation, usage type, and many more.
This information is converted into a rating on a scale A – G. Buildings with a rating close to A produce lower amounts of CO2 and are more efficient than buildings lower down the scale. For both residential and commercial buildings, the vast majority (around 60%) of ratings are either C or D. EPCs also contain recommendations on how the buildings energy efficiency can be improved, non-domestic EPCs contain these recommendations in a separate report.
WHY WERE EPC'S INTRODUCED?
40% of the UK’s energy consumption and carbon dioxide emissions comes from buildings. EPCs were introduced through the Energy Performance of Buildings Directive, with its main objective to promote the improvement of the energy performance of buildings.
The Housing Act 2004 introduced domestic EPCs to England and Wales in August 2007 for residential properties. Non-domestic EPCs were introduced in October 2008. Non-domestic or Commercial EPCs were introduced in October 2008.
WHEN IS A COMMERCIAL EPC REQUIRED?
A non-domestic (commercial) EPC is required whenever a commercial property is built, sold or let and there is not a valid EPC in place. An EPC is required as follows:
– Building types including offices, retail units, industrial premises, warehouse and storage units, hotels, healthcare and educational buildings.
– The floor area is greater than 50m2.
– The building incorporates fixed services that condition the interior environment e.g. heating and/or cooling.
– When a commercial property under construction is completed.
– If changes are made to the number of parts used for separate occupation and these changes involve providing or extending fixed heating, air conditioning or mechanical ventilation systems.
If an EPC is not made available to prospective buyers or tenants, depending on the rateable value of the premises, a fine of £500 – £5000 can be potentially issued to the owner, the agent can also potentially be held accountable by Trading Standards.
WHEN IS A COMMERCIAL EPC NOT REQUIRED?
A commercial (non-domestic) EPC is NOT required if you can demonstrate that the building is:
– A listed building or officially protected and any potential energy performance improvements would unacceptably alter it.
– A temporary building to be used for less than 2 years.
– Used as a place of worship or for other religious activities.
– An industrial site, workshop or agricultural building that does not contain fixed heating, air conditioning or mechanical ventilation systems.
– Detached with a total floor space of under 50m2.
– Due to be demolished and the owner has all relevant planning and conservation consents in place.
– Free of any fixed services that condition the internal environment.
HOW LONG IS AN EPC VALID FOR?
Once issued, an EPC is valid for up to 10 years and can be used multiple times throughout this period. As the building owner, if you make changes to anything affecting the energy performance of the property e.g. the heating system or insulation levels, it would be advisable to get a new EPC to detail the improved rating but this is not mandatory. If a new EPC is obtained, it renders all previous EPCs obsolete.
If an EPC is close to the end of its legal life i.e. 9 years and 11 months old, it will continue to be valid for the duration that the property is continuously marketed for. If the property is taken off the market for 28 days or more, a new EPC will need to be commissioned if the existing EPC is over ten years old when the marketing of the property is resumed.
WHAT ARE THE IMPLICATIONS OF A POOR EPC RATING?
The immediate implication is that it will mean the building is not energy efficient, will be costly to run and will produce high amounts of CO2. Perhaps more worrying is that looming in the near future, April 2018 to be precise, it will be illegal to rent out a property with an EPC rating of F or G. This applies to both residential and commercial buildings. More information on this potentially highly significant detail can be found in the Energy Act 2011 legislation.
WHEN MUST AN EPC BE OBTAINED?
If a valid EPC is not in place, the owner or landlord must make all reasonable efforts to obtain an EPC within 7 days of the property being marketed for sale or to let, ideally before.
WHAT HAPPENS IF AN EPC IS NOT AVAILABLE WITHIN 7 DAYS?
Should all reasonable attempts to obtain a valid EPC with 7 days of the property being marketed fail, then a further 21 days grace will be ‘allowed’ to commission and secure an EPC. Effectively there is a total window of 28 days, however, this is not a licence to delay matters as Trading Standards could become involved and challenge the building owner or landlord to ‘prove’ their reasonable efforts to secure an EPC within the initial 7 day window.
WHO'S RESPONSIBLE FOR OBTAINING AN EPC?
Legally, the building owner or landlord is responsible for obtaining the EPC .
The agent responsible for selling, letting or leasing the property has a duty to be satisfied that an EPC has been commissioned before taking the property to market. They must also make all reasonable efforts to ensure the EPC has been obtained within 7 days of commencing marketing activities.
WHAT ARE THE PENALTIES FOR NOT HAVING AN EPC?
For residential properties, there is a fixed penalty of £200 per dwelling which can potentially be served to both the owner and the agent.
For commercial properties, there is a fixed penalty of between £500 – £5000 depending on the rateable value of the premises which can potentially be served to both the owner and the agent.
HOW ARE EPCS ENFORCED?
The Local Authority Trading Standards agency in your area is the enforcement authority who poses the statutory powers to demand to production of an EPC from the owner or agent if they believe an offence has been committed. Trading standards can request evidence proving that an EPC has been commissioned before a property is first marketed.
The time limit for enforcement action to be taken is 6 months. The owner and agent both have the right to request that penalty notices are reviewed and there is a right of appeal to the County Court against a penalty notice.
WHEN MUST AN EPC BE MADE AVAILABLE?
Landlords and sellers have a duty to make the EPC available free of charge to prospective tenants and buyers at the earliest possible opportunity. A copy of the EPC must be provided to the successful tenant or buyer before any legal paperwork has been signed.
WHERE SHOULD THE EPC RATING BE DISPLAYED?
Since 9 January 2013, it is now a legal requirement to display either the EPC rating e.g. D or the EPC graph on all property particulars, both hard-copy and electronic. The EPC rating must also be included in all advertisements, e.g. newspapers and websites.
If there is no EPC available at the time of a ‘one off’ print publication such as a newspaper advert or auction catalogue going to print then no offence will have been committed and no penalties will be applicable. If the publication was to be reprinted after an EPC had been produced, then the rating would need to be included in the new advert or brochure.
WHAT ABOUT GAINING ACCESS TO UNDERTAKE AN EPC SURVEY?
Under the EPC regulations, tenants are obliged to co-operate i.e. provide access to the surveyor in order to produce an EPC. The tenancy agreements may state this in a clause. The required prior notification must be given to the tenant.