Energy Performance Certificates

What is an Energy Performance Certificate?

An Energy Performance Certificate (EPC) provides a rating for the energy performance of a building. The ratings are standard so the energy efficiency of one building can easily be compared with another building of a similar type.

EPCs are similar to the certificates now provided with domestic appliances such as refrigerators and washing machines. They give building owners, occupiers and purchasers information on the energy efficiency and carbon emissions of their building. The EPC rates the energy efficiency and carbon emissions of a property on a scale of A to G, where A is the best.

A recommendation report is attached to the certificate, providing information about ways to improve the energy efficiency of the property. The certificate also shows the rating that could be achieved if all the recommendations were implemented.

It is the responsibility of the person selling or renting a building to have a valid EPC to show to prospective buyers and tenants. The EPC must be given to the eventual buyer or tenant. There is no requirement to get an EPC for buildings that are just being occupied normally other than when they are being sold or let.

Failure to provide an EPC may result in a heavy fine being imposed.

View An Example

From April 2018, the legislative changes will make it unlawful to let residential or commercial properties with an EPC Rating of F or G.

This could have very significant implications for landlords – and for occupiers who wish to assign or sublet space – including:

  • Marketability of some properties would become impossible unless they are upgraded in energy efficiency terms. It is estimated that about 20% of non-domestic properties could be in the F & G ratings bracket. It is important to note that some prime properties will be in this situation – it is not just about secondary or tertiary stock.
  • This situation could apply to all lettings and re-lettings, including sub-lettings & assignments.
  • Valuations of such properties would be obviously affected if their marketability is diminished.
  • Rent reviews for properties in this situation would also be affected.
  • Implications for dilapidations assessments would exist.

To address the implications of the proposed changes, landlords and occupiers will need to assess the status of their properties’ energy efficiency. Thereafter, they will need to consider undertaking retrofits or refurbishments and possibly bringing forward properties for marketing prior to 2018 or re-gearing leases. Some landlords and occupiers will need to consider how their property values may be affected if they are caught up in the proposed regulations.

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