New Legislation Makes Energy Performance Certificates Compulsory for Commercial Properties

Energy Performance Certificates (EPCs) were introduced in England and Wales on 1 August 2007 as part of Home Information Packs (HIPs) for domestic properties, and remained in force even after HIPs were abandoned a few years later in 2010.

Trading Standards officers will now have the authority to request at any time that landlords produce a copy of their property’s EPC, and under this new regulation, they will have the power to fine a business up to £5,000 for non-compliance. It may not come as a surprise that companies specialising in Energy Performance Certificates have seen a recent rise in enquiries from commercial landlords regarding assessing their properties.

Originally confined to non-commercial properties, the new legislation in April 2012 has made Energy Performance Certificates a legal requirement for anyone selling, leasing or building commercial buildings too.

Perhaps perceived in the past as a somewhat unnecessary document, EPCs are in fact an invaluable source of information and could actually prove a wise commercial expense.

Energy Performance Certificates contain two parts. The first part reports on the energy efficiency of the building assessed, from light bulbs, heating system, wall and loft insulation, etc, and allocates an energy efficiency grade accordingly, from A to G, A being the most efficient and G the least efficient. The second part recommends energy efficiency measures which can be implemented to improve this grade, the cost involved and the projected savings on energy bills.

An EPC can therefore greatly increase the value of a building by showing prospective buyers or tenants how efficient it is, and companies considering leasing a commercial property will indeed use EPCs as an indication of what the property is likely to cost them in heating. Armed with this knowledge, they can make an informed decision, taking into account not only the lease price but also the running costs of the property.

For anyone considering purchasing a building rather than leasing it, it will give them clear visibility about how its grade, and therefore ultimately its value, can be improved, at what cost, and the expected financial benefits. While it may in some cases play in the buyer’s favour, it will more often place a landlord in a stronger position to negotiate a good selling price if their property is energy efficient, by stressing its lower long-term running costs.

All that is required to obtain an EPC is a visit from an accredited energy assessor who will evaluate the property and issue a certificate. As soon as the building has been checked, it becomes legal for owners to market it, and you will have avoided being liable for a hefty fine! To find out more about EPCs and what Edward P. Carlson can do for your property, visit our website!

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