Good Advice - Properties now need energy rating

Apr 1 2008 by John Morgan, The Journal

NEW Government regulations to provide Energy Performance Certificates (EPCs) come into force for commercial properties with effect from April 6.

Implemented as part of UK obligations under the 1997 Kyoto Protocol, the new regulations will require preparation of an EPC, which provides an energy rating based on the performance potential of the fabric of and services serving the building. The EPC rates the energy efficiency and environmental impact (CO2 emissions) of the building from A (excellent) to G (poor) and lasts for 10 years. It will also include a recommendation report summarising methods of improving a building’s rating.

When the regulations will apply: Domestic EPCs are already required on the construction, sale or letting of residential properties. For commercial properties, the regulations will apply only on construction, sale or letting of commercial properties. There are no plans for property to need an EPC if it will remain in the same ownership. Initially, at least, the impact of the regulations will be quite limited; it has been confirmed renewals of existing leases or lease surrenders will not require the preparation of an EPC.

From April 6, an EPC will only be required for buildings with a “useful floor area” greater than 10,000 m2 (107,600 sqft). This will be extended to buildings larger than 2,500 m2 (26,900 sqft) from July 1.

The obligation to produce an EPC arises when a property is put on the market for sale or rent: if an EPC is commissioned before marketing but is not completed, it must be complete before exchange of contracts/lease completion. Failure to comply can result in a fine of up to £5,000.

Future regulation: Air conditioning systems with a power output of greater than 12 KW will become subject to mandatory inspection on a five-yearly basis – existing systems must be first inspected before January 4, 2011, or January 4, 2009, if their rated output is greater than 250 KW. New systems installed after January 1, 2008, must have their first inspection within five years of being put into service.

John Morgan is a solicitor in the Commercial Property Department at Dickinson Dees LLP