| Energy Performance Certificates for Commercial Premises |
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22 June 2009 By Susan Poole, Partner, Commercial Property What is an EPC? An EPC is the abbreviation for Energy Performance Certificate. The certificate shows the "asset rating" of a building expressed on a scale of A (very efficient) to G (least efficient) and is designed to give information to prospective buyers or tenants on the energy efficiency of a building.
The Commercial EPC is different from a residential EPC in that it is much more intensive and thorough. Consequently, it is designed to function on its own without the home information pack needed in residential transactions. References to EPCs in this article are to commercial energy performance certificates.
The certificate will be accompanied by a report with recommendations suggesting how to improve the energy efficiency of the building and will give a "potential" energy rating that may be achieved should the recommended measures be implemented.
When is an EPC needed?
By law, from the 1st October 2008 an EPC is required whenever a building is constructed, sold or rented out.
The EPC must be made available to the owner of a newly constructed building by the building contractor and to the buyer or tenant of a property that is sold or rented.
An EPC must be provided to a prospective buyer or tenant, free of charge, at the earliest opportunity. It is the seller's or landlord's responsibility to provide the EPC on whichever of the following first occurs:
Do all buildings need an EPC?
To qualify as a building for the purposes of an EPC the property must be, "A roofed construction with walls for which energy is used to condition the indoor climate." So, for example, a building that uses air conditioning or central heating would need an EPC. (There are also separate requirements for buildings that have air conditioning systems).
However, there are some exceptions, these include: temporary buildings with a planned time of use of less than two years, buildings that are to be demolished and stand-alone buildings with a total useful floor area of less than 50 sq m do not currently require an EPC.
Other Industrial buildings and workshops where the internal air is not fully heated or cooled may also be exempt. It is therefore, definitely worth checking with your advisor to see if your building falls into one of the exemptions.
Do all transactions need an EPC?
An EPC will not be required in the case of lease renewals or extensions, compulsory purchase orders, lease surrenders and sales of shares on a company where buildings remain in company ownership as these are not transactions that are considered to be sales or lets.
How long is the EPC valid for?
The EPC is valid for 10 years from the date of issue.
Where do I get an EPC and how much will it cost?
An EPC can only be provided individuals who are accredited Commercial Energy Assessors (CEA).
In the Commercial arena, properties are broken up into "levels" based on various property factors. The CEA has to be qualified for the appropriate property level that they are assessing.
The CEA will normally request advance information concerning the size, construction and use of the property together with details in connection with the heating system prior to making a site inspection. The report and certificate will then follow.
There are many EPC providers who operate nationally and locally. Quotes for obtaining EPCs vary tremendously and in our experience it pays to shop around to make sure that you achieve the most competitive deal. Prices will also depend on factors such as the size and use of the building in question.
What if I don't get an EPC?
If your building does not fall within one of exceptions referred to above and the transaction requires an EPC then failure to provide the required EPC may result in penalties being imposed by Trading Standards Officers.
The penalty in most cases is 12.5% of the rateable value of the building, with a minimum penalty of £500 and a maximum of £5,000.
Contact our team for more information.
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