The rules and regulations on Energy Performance Certificates (EPCs) are frequently changing, but it is important to be aware of your responsibilities.
An EPC is a certificate containing information relating to the energy efficiency of a building and can be useful for buyers/tenants in deciding on whether or not to take on a property.
When is an EPC required?
- When you are selling or renting out a property (but not where it is merely a lease renewal)
- When a newly built property is completed
- Where there is any change to the number of parts of a building used for separate occupation involving changes to heating, air conditioning or mechanical ventilation systems.
An EPC must be commissioned before a property is marketed for sale or rent. Generally, if there have been no changes to a building then an EPC is valid for 10 years.
Requirement to Display
Where a commercial building is frequently visited by the public and has a floor area of more than 500 square metres then it is a requirement that the EPC must be displayed in a prominent place, clearly visible to members of the public who visit the building. There is a penalty of £500 for failing to display the EPC.
An EPC is not required if it can be shown that the building falls into one of these categories:
- Listed or officially protected and the minimum energy performance requirements would unacceptably alter it
- A temporary building only going to be used for not more than 2 years
- Used as a place of worship or for other religious activities
- An industrial site, workshop or non residential agricultural building which doesn’t use much energy
- A detached building with a total floor area of not more than 50 square meters
The penalty for failing to make a commercial EPC available to a prospective buyer or tenant is in most cases fixed at 12.5% of the rateable value of the building, with a default penalty of £750.00 where the formula can’t be applied, and a minimum of £500 and maximum of £5,000.00.
Landlords of commercial properties may not grant a tenancy to new or existing tenants if their property has an EPC rating of band F or G (subject to exemptions).
In April 2023 this restriction will apply to leases already in existence, no matter when they were granted.
Proposed Changes for commercial properties – likely to be confirmed in 2025
1 Apr 2027: Interim requirement of a C EPC rating
1 Apr 2030: Requirement for a B EPC rating
It is estimated that only 12% of commercial premises have an EPC rating of B or above so there will need to be some significant upgrades to existing buildings