News

The business of energy efficiency: Energy Performance Certificates and Air Conditioning Reports

Release date: 01/12/2008

Caroline Sutcliffe, solicitor in the Retail Property team provides a summary of the new regulations surrounding Energy Performance Certificates (EPC's) and their practical impact for commercial premises.

What is an EPC?

A certificate which expresses an energy rating for a building. Measures CO2 emissions

When is an EPC required?

An EPC is required on the construction, sale or letting of a building.

Definition of "building" - must have a roof and walls for which energy is used to condition the indoor climate

Not retrospective - existing occupiers and tenants not required to have EPC

Seller/Landlord to provide EPC at earliest opportunity at their own cost ideally whilst marketing the property

Not required for Lease renewals and surrenders

Specific issues relating to retail properties
1. Centre where units have common heating system and with conditioned or unconditioned common parts

Landlord will produce 1 EPC for whole building (common parts included) which can then be used for whole or part if sold or let.

2. Centre where units have separate heating systems and conditioned or unconditioned common parts

Landlord can either
(i) produce 1 EPC for whole building (common parts included) only where selling or letting whole; or
(ii) produce 1 EPC for each unit when sold or let (common parts not included).

EPC for single unit can be based on an assessment of a similar representative unit in the same block.

3. Shop with dwelling above

If dwelling has separate access Landlord should produce 1 EPC for dwelling and 1 EPC for shop.

If a dwelling can only be accessed through shop Landlord produce 1 EPC for building.

4. New build/ refurbished premises

Developer must produce EPC when building erected or converted/ modified into fewer or more units and services modified.

Building control inspector cannot issue completion certificate for works until EPC produced.

Shell building - if not all services are provided at point of sale/ completion of a lease then EPC should have been provided on basis of specification.

5. Alterations/ refits

Internal refit with new heating, hot water, air conditioning or ventilation will not require EPC unless building is modified to create fewer or more parts for separate use and then new EPC required.

What information does an EPC contain?

Asset rating - scale A to G (similar to domestic appliances) with A being most efficient

Reference value - benchmark against which asset rating can be judged

Reference number (used to access register (see below))

Address of building

Estimate of total useful floor area of building

Name of Energy Assessor

Date issued

Name of approved accreditation scheme to which assessor is a member

Comes with a recommendation report - no compulsion to comply with recommendations

What information will an assessor require to issue an EPC?

Details of individual spaces or zones in use in building and dimensions

Activities conducted within zones e.g. retail space or storage

Heating/ ventilation services for each zone - type of system

Lighting

Construction of fabric of building/ thermal efficiency of materials

If plans not available with above information a site visit may be required

Must ensure assessor is accredited and qualified to value your type of building

Where can I see if an EPC has been prepared for a building?

Central register where all EPC's must be registered (duty of assessor)

Need individual reference number to access certificate (protects privacy and limits access)

EPC is valid for 10 years

EPC is revoked if new one is issued. If EPC produced for whole of building and a new one produced for part it will not revoke the original EPC

What happens if an EPC is not provided when due?

Trading standards can issue a penalty charge notice

Penalty is 12.5% of rateable value (minimum £500 and maximum £5,000.)

Defence if EPC commissioned at least 14 days before required (need evidence of instruction)

Defence if insufficient time due to urgent relocation of tenant

Until 04/01/09 where property marketed before 01/10/08 no need to have an EPC until after exchange of contracts

Air Conditioning Regulations

New regulations governing assessment of air-conditioning efficiency of systems by assessment of size of system compared with cooling requirements of building

Installed before 01/01/08 with output more than 250kw - needs to have inspection by 04/01/09

Installed before 01/01/08 with output more than 12kw - needs to have inspection by 04/01/11

Installed after 01/01/08 with output more than 12kw - needs to be inspected within 5 years

All inspections thereafter must be every 5 years

Fixed penalty £300

Practical impact on market?

Tenants with corporate social responsibility policies may seek more energy efficient buildings

Higher rated buildings will be cheaper to run

Dominating factors are still likely to be the nature of building, location and suitability for purpose rather than energy efficiency

If you require any further information on this or any other aspect of retail property, please contact Caroline Sutcliffe of the Retail Property team on caroline.sutcliffe@harveyingram.com or 0116 257 4445.

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