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The Law

The EU 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.

What is an EPC?

An EPC is a measure of the notional energy performance capability of a building. The energy rating is expressed on an A to G colour coded bar chart scale, similar to those seen on cookers and fridges. 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 suggestions to improve the energy efficiency of the building in short, medium and long payback periods.

Timing

From 1 October 2008 all commercial buildings on the market for sale or let require an EPC to be in place. Newly constructed buildings require an EPC before completion can take place. There is a common misconception that an EPC is only required when the property is placed under offer. This is wrong. The Regulations require that an EPC be in place from the first day the building is marketed.

Valid period

An EPC is valid for 10 years. The certificate is available on the UK Government’s Landmark database which has full public access.

Responsibility

The legal responsibility to have an EPC lies with the organisation that has placed the building on the market e.g. landlord, company seeking an assignment or subtenant. The marketing agent also has a legal responsibility to have EPCs in place for the buildings they are advertising.

Multi-Let buildings

Clients have a choice. They can have an EPC for just the part being marketed or for the whole building. One EPC can be obtained to cover the whole of a multi-let building only if it has a common, centralised heating system.

This EPC can then be reused for the next 10 years if individual floors or suites are let or if the whole building is et or sold. If the different areas have individual heating systems then a separate EPC is required for each part being marketed.

Exempt situations

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
  • EPCs are not required for:
  • 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.

Non compliance

The penalty for failing to have an EPC in place whilst a 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. For completed transactions they can go back six months from the date of the deal. The penalty is repeated every 28 days if an EPC is still not prepared.