New requirement for EPCs for commercial properties from 1st October 2008
From 1 October 2008, Energy Performance Certificates (EPCs) are now required for all commercial property that is being sold or let. Production of the Certificate is the liability of the Landlord/Seller as is the cost of having one prepared. The average amount for an EPC is £500 and it records the energy efficiency of a property between a rating of A to G. If there is a Service Charge applicable to the property, then the costs of the EPC can be recovered under that in most circumstances.
Any building which is a “roofed construction having walls, for which energy is used to condition the indoor climate” will fall into the legislation. A building such as a warehouse which only has hot water or electric lighting does not fall within the Regulations. Nor do warehouses with low energy demands such as storage units.
From 1 October 2008, if the property is to be let or sold, the Landlord/Seller will have to provide at the viewing or when sending out the Particulars, an EPC. It is an offence not to provide an EPC at that time.
There are transitional provisions in place for properties over 10,000 sq m which were on the market before 6 April 2008 and remained on the market at that date. In this respect, an EPC is not required until the Contract for the sale or lease is exchanged.
Any properties under 2,500 sq m which were on the market before 1 October 2008 and remained on the market at that date, again, do not need to provide an EPC until the Contract/Lease is exchanged.
The body which has been awarded the ability to penalize Landlords/Sellers has a period of six months after a transaction has completed in which to check if an EPC was provided and issue a Penalty Notice. There is to be a register of EPC’s issued which will be kept by Landmark Information Group. Anyone can check with this Company if an EPC exists for the property, therefore saving duplication. The penalty for non-compliance with the Regulations (as far as commercial property is concerned) is 12.5% of the rateable value of the building with a minimum fine of £500 and a maximum fine of £5,000.
As if the provision of an EPC is not enough, those of you who have control of an air conditioning system, must have them assessed by an Energy Assessor every five years now. Systems with an output of more than 250kw must be inspected before 4 January 2009, and those with an output of more than 12kw must be inspected by 4 January 2011. If you are a Landlord of property with the benefit of an air conditioning system which you have control of (i.e. you charge the cost back via Service Charge to tenants) then you must arrange for the system to be checked urgently. For those with the lower output air conditioning systems, please diary note to have your systems checked by the end of 2010.
Rutherfords Solicitors can provide you with further advice and direction with regard to EPCs and air conditioning system assessment. Please contact either Catherine Wengraf or David Waterhouse with any queries.
