EPCs - The hidden danger
An Energy Performance Certificate (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. However, tenants who alter a building in any way may find themselves liable for providing a new EPC.
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). The energy rating given on the certificate reflects the intrinsic energy performance standard of the building relative to a benchmark which can then be used to make comparisons with comparable properties. It is accompanied by a recommendation report, which provides recommendations on how the energy performance of the building could be enhanced, together with an indication of the pay back period.
For a building to fall within the requirement for an EPC it must have a roof and use energy to condition the indoor climate. An EPC is only required for a building when constructed, sold or let.
What is not, however, commonly understood by owners and their advisors alike is that where a building is modified, whether by reason of a fit out or otherwise, after an EPC has been provided and such modification causes the building to have more or fewer parts than it originally had and includes the provision or extension of fixed services for heating, air conditioning or mechanical ventilation then a further EPC will be required. When the modifications are physically complete it is the responsibility of the person carrying out the modification works to give an EPC and recommendation report to the building owner and to notify Building Control that this has been done. Building Control will not issue a certificate of completion until they are satisfied this has been done.
Responsibilities for providing EPCs when selling or letting a non-dwelling
As soon as a building is in the process of being offered for sale, it is the responsibility of the seller to make available an EPC to prospective buyers free of charge. Likewise as soon as a building is in the process of being offered to let, it is the responsibility of the prospective landlord to make available an EPC to prospective tenants. A lease assignment would be considered to be a sale and the assignor will need to provide the EPC.
As enforcement officers can request a copy of an EPC from a landlord or seller at any time up to six months after it was required, it would be prudent for sellers or landlords to retain their reference number issued when the EPC was registered so that a copy can be obtained from the register if required.
Penalties for not having an EPC
The local authority trading standards department is responsible for enforcing the requirement to have an EPC on sale or let of a building and failure to make available an EPC when required by the Regulations means that the seller or landlord may be liable to a civil penalty charge notice. In most cases the penalty is 12.5% of the rateable value of the building with a default penalty of £750 where the formula cannot be applied. The range of penalties under this formula are set with a minimum of £500 and capped at a maximum of £5,000.
Do I need a new EPC every time I let my building?
As long as a valid EPC exists for the building you can provide this to prospective tenants. An EPC is valid for 10 years and during this period one can provide the same EPC to prospective tenants. The EPC will no longer be valid if a newer EPC has been registered. Obviously if the building has been modified so that is has a greater or fewer number of parts designed or altered for separate use than it previously had whether modification includes the provision or extension of any the fixed services for heat, hot water, air conditioning or mechanical ventilation, then a new EPC will be required.