UK: Energy Performance Certificates

Last Updated: 30 July 2008
Article by Sarah Taylor

Given that the building sector is thought to account for about 50% of the UK's total carbon dioxide emissions both energy efficiency and climate change issues are set to feature highly in the regulation of the property sector in 2008. In particular the European Directive on the Energy Performance of Buildings requires Energy Performance Certificates (EPCs) and Display Energy Certificates (DECs) to be provided for all buildings placed on the property market for sale or rent.

When?

The requirements will be implemented in three phases during 2008 but for the purposes of sports stadium construction specifically from 6 April 2008 EPCs will be required for the construction, sale or rental of non-dwellings with a floor area greater than 10,000m2. This will also apply to all commercial buildings of more than 2500m2 from 1 July 2008 and to all other commercial buildings from 1 October 2008.

What?

An EPC will provide an energy rating for a building which is based on the performance potential of the building itself (the fabric) and its services (such as heating, ventilation and lighting). It will be accompanied by a recommendation report on how the energy performance of the building could be enhanced, this report must be retained and held with the certificate itself. From 1 October 2008 DECs are also required for all public buildings with a total useful floor area over 1000m2 occupied by public authorities and by institutions providing public services and must be placed in a prominent place clearly visible to the public.

Why?

An EPC is intended to inform potential buyers or tenants about the energy performance of a building, so they can consider energy efficiency as part of their investment or business decision to buy or occupy that building; an important consideration for company directors who now have a duty to have regard to the impact of their company's operations on the community and the environment.

Who?

In the case of a newly constructed building, the building contractor will be responsible for providing the EPC certificate to the owner; clearly this will now become an essential part of the commissioning process. For buildings that are to be let it will be the responsibility of the landlord. Government guidelines state that a valid EPC and recommendation report must be made available free of charge by a seller or landlord to a prospective buyer or tenant and at the earliest opportunity, which in any event must be before entering into a contract to sell or let. The guidelines do state, however, that a lease renewal or extension does not amount to a sale or let and therefore it seems that EPCs will not be required in these circumstances. Conversely buildings that are to be demolished may well require an EPC unless conditions such as a sale with vacant possession and intent to demolish can be proven.

Failure to obtain an EPC may result in a penalty charge. In most cases this will be fixed at 12.5% of the rateable value of the building, capped at a maximum penalty of £5000.

An EPC for a non-dwelling will last for 10 years. If there is a change of tenants but the EPC is still valid, a new certificate will not be required. EPCs and the reports are to be registered with the Local Authority and records kept for 20 years.

In terms of any potential impact that an EPC may have on a building's value it is thought that buyers may be in a slightly better position to negotiate a better price if the EPC shows a low rating. It is recommended that energy assessors are appointed at an early stage so that this can not lead to any delay in a transaction; there is some speculation that during this year there may not be sufficient numbers of assessors trained to handle the commercial property market. This could lead to inflated costs and delays.

How Will This Affect The Sports Industry?

Although a stadium may not strictly fall under the definition of a building for the purposes of the regulations, developers and sports clubs and associations will still be under an obligation to ensure that the adjoining buildings comply with the regulations set out under the Directive. Such bodies firmly placed in the public eye may wish to take the lead in the implementation of such initiatives.

Last summer the England & Wales Cricket Board and their domestic test match sponsor Npower announced plans to work together on the first 'green audit' of a sport by a UK national governing body. This proposed to review energy use at the UK's seven test match grounds in order to reduce carbon emission by at least 10% by this spring.

Commercial Implications

Clearly the better the energy efficiency rating of a building the lower fuel bills are likely to be. We have seen already the decision of certain US pensions funds not to invest in property that does not meet certain high environmentally friendly criteria. Other high profile companies such as Marks and Spencer have made notable, well publicised efforts to increase both the energy efficiency of their building stock and energy use in those buildings. This could well lead to a two tier market emerging that differentiates between improved, energy efficient properties commanding higher values and higher yields against those which are not improved and which will have lower values and yields.

It is not yet clear whether a poor EPC rating will actually compel landlords to implement measures to improve this. The display of these reports and implementation of their recommendations are not mandatory. There is, therefore, scope for debate whether landlords should be required by tenants to undertake certain improvement works or whether landlords can enforce upon tenants requirements as to the efficient use of energy in their buildings. This could lead to the difficult situation where although landlords may be able to command a premium for a more energy efficient building they may not be able to fully recoup the costs of improvements made to increase the energy efficiency of that building, and therefore to improve its EPC rating, because tenants may not be prepared, or even obliged under their leases, to repay these costs. However, it is the tenant that would benefit in the long run through savings in use or running costs.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions