The building sector in the EU accounts for nearly 40% of the EU’s total energy consumption. In order to achieve greater energy efficiency the EU has therefore focussed on increasing the energy efficiency of buildings.
The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007 implemented the European Energy Performance of Buildings Directive (2002/91/EC) in the UK. They have been amended by various statutory instruments since and contain four main requirements:
- Energy Performance Certificates (EPCs) for newly built properties and for any property sold (including the sale of a leasehold or rack rent lease) or rented out. These triggers create an absolute obligation to provide the EPC for the property in question (details below).
- Display Energy Certificates (DECs) for larger buildings occupied by public authorities and institutions providing public services.
- Regular Air-conditioning system inspections with an output of more than 12kW (details below).
- Whoever assesses and produces the above needs to be accredited.
General requirements of the EPC
Since October 2008 all properties (except those that have been excluded explicitly – see below) in England and Wales require an EPC if any of the trigger events referred to above occur. For residential property, this has already been obligatory practice for a while and EPCs are part of the standard Home Information Packs already.
The EPC needs to contain an asset rating of the building, a reference number under which the EPC is registered, the property address, an estimate of the total area, the name of the accredited energy rating assessor, a date of issue and the name of the approved accreditation scheme under which it was issued. It will also contain a recommendation report as to how the energy performance of the property can be improved.
A block of residential flats cannot be assessed as a block, but must have an EPC for each flat within. Having said that, an EPC can be produced for each flat based on the basis of the assessment of other flats in the same block, if they are comparable.
For a mixed use development or a block with commercial units with a common heating system one single EPC can be produced for the whole block. If only one unit within the block is being sold, a separate EPC for this unit can also be prepared.
If the heating system is not shared within the development, an EPC for each unit is required. Once again, this can be based on an assessment of a similar unit within the block.
Exemptions from the EPC
The following properties are exempt from the provision of an EPC on any given trigger event
- Properties that are solely or primarily used as places of worship
- Temporary buildings where the time of use planned is two years or less (e.g. properties to be destroyed in the near future for development).
- Industrial sites, workshops and agricultural buildings with a low energy (heating) demand
- Buildings with a total internal area of less than 50 square metres (provided it is not a dwelling
- Buildings that are to be destroyed upon acquisition (please note that these buildings need to be vacant at the time of acquisition, the building must be “suitable” for demolition and evidence of the intention to demolish, such as a planning application, will need to be shown
Validity of the EPC
The EPC is to be provided by the seller to the buyer (or prospective buyer) of a property free of charge. This means the EPC needs to be provided by the earlier of:
- Marketing of the property to a prospective buyer
- Viewing of the property by a prospective buyer
- Exchange of contract for the sale of the property
The seller therefore has to pay for the certificate and will have to provide it as soon as possible when a party shows interest in the property.
Generally, the EPC will last for ten years from the issue date. It is to be noted that any new EPC for a property will revoke the previous certificate given for the same property. This can create difficulties where more than one party is providing certificates. This is dealt with in more detail in part 2 of this article.
If an EPC has to be produced as part of an HIP it should be no older than three years old when the property is marketed.
Inspection of Air-Conditioning Systems
The regular assessment of air-conditioning systems of more than 12 kW is obligatory on a five yearly basis. This applies to all new systems.
For existing systems, any that have more than 250kW output need to be inspected regularly from 4 January 2009 and for the remainder there is a period of grace until 4 January 2011.
Enforcement of Regulation
The enforcement of the regulations will be overseen by the Trading Standards Officer who will issue a penalty notice if the regulations were not complied with.
For residential property sold without a valid EPC the penalty is currently £200. However, with regard to commercial property it is set as 12.5% of the rateable value of the property, with a minimum charge of £500 and a maximum of £5,000.
There are a number of occasions where such a penalty will not be issued, for details please speak to our Commercial Property Team.
Please also see part two to this news brief relating to the costs of EPCs and who is responsible for them.
