COMMERCIAL EPCs

EPC (Energy Performance Certificates) have been common place in the domestic world for a number of years now, if you've rented, bought or sold a house since 2008 you would have seen one.

Commercial EPCs;

A commercial EPC is an assessment of a premise’s energy performance based on building characteristics and its installed services including for example lighting and heating systems.

Ratings reflect considerations such as the age and condition of the building.

Each assessment output includes improvement recommendations, ways in which building efficiency ratings can be increased.

Under current regulations, since 2008, all commercial buildings must have an EPC assessment carried out when the building is ‘transacted’ so when constructed, sold or leased. This includes the renewal of existing tenancies.

An EPC is also required when certain building changes are made, these changes include providing or extending fixed heating, air conditioning or mechanical ventilation systems.

The focus continues to increase on energy performance in the commercial workplace.

From 1 April 2023, all privately rented commercial premises will require a valid EPC to be in place in order to lawfully continue to let a commercial property.  Also, a minimum allowable rating of E will apply. 1/2/3

Understanding your current EPC ratings and improvement requirements now allows building owners and managements to financially and operationally plan ahead.

¹  All relevant improvements have been made and the property remains sub-standard High cost: improvements are not cost-effective -Wall insulation: only improvements would negatively impact on the fabric or structure of the building -Consent: consent is required by a third party (e.g. superior landlord) to undertake improvements and has been refused -Devaluation: improvements would devalue the property by more than 5%

The exemptions must be applied for and evidence provided. An exemption will last for 5 years, after which the landlord must improve the EPC rating or re-apply for an exemption. If the property is sold, the new landlord will not automatically be exempt.

²  Penalties: A commercial landlord granting a new lease, renewing a lease now or continuing to let after 1 April 2023 may face financial penalties of:

Breach <3 months: 10% of rateable value (£5,000- £50,000)

Breach >3 months: 20% of rateable value (£10,000- £150,000)

Providing false or misleading exemption information: (£5,000)

Failing to comply with a compliance notice: max. £5,000

³ Landlords of commercial property have an additional 3 years to improve ratings to an E or above, unless granting a new lease or renewing a lease.