Energy performance certificates

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Building owners, landlords and tenants

From 1st October 2008 all Sellers of commercial building and Landlords will be required to provide an Energy Performance Certificate (“EPC”) for all buildings or parts of buildings when they are rented or sold.

EPCs are already required for larger premises that are to be rented or sold (above 2,500 square meters). The EPC provides an energy efficiency A-G rating and recommendations for improvement. It tells potential tenants and buyers about the energy performance of a building so that they can consider energy efficiency as part of their investment or business decision to occupy or buy a building.

Acting on an EPC is intended as being an important means of cutting energy consumption, saving money on bills and safeguarding the environment. When buildings are to be rented out the Landlord is responsible for ensuring a valid EPC is made available to all prospective tenants. The letting of a commercial building can be that with floors let to different tenants, and includes all commercial uses, be it office, retail or residential etc and include buildings in mixed or single use.

Similarly on the sale of a building the Seller is responsible for ensuring an EPC is made available to all prospective buyers as soon as possible. An assignment of lease is also considered a sale and again it is the Seller (“the Assignor”) who should provide the EPC. In all situations the EPC and recommendations report must be made available free of charge by the Landlord to prospective tenants or by a Seller to prospective buyers at the earliest opportunity and no later than;

  • When any written information about the building is provided in response to a request for information received from a prospective tenant or buyer.
  • When a viewing is conducted.
  • If neither of the above occurs, before entering into a contract to let or sell.

EPCs may well therefore in many cases significantly add to the cost of letting or selling a building. Failure to provide an EPC will lead to a fine which in most cases is fixed at 12.5% of the rateable value of the building, subject to a minimum of £500 and maximum of £5,000 In the short term, before 1st October 2008, Landlords and Sellers of buildings up to 2,500 square meters (buildings above, already having to provide an EPC and recommendations report) may wish to consider the advantages of marketing, not at least for the time being required to provide an EPC from 1st October 2008 if the property or the building is being marketed prior to that date. For more information contact Simon Exley in the Slee Blackwell Commercial Department on 01271 349968.