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EPC or no EPC? That is the question

17 September 2018 • Bhaven Chauhan

The question of whether or not an Energy Performance Certificate (EPC) is required for a particular commercial property transaction can be complex and confusing for landowners and landlords. EPC regulations aren’t easy to follow, and if you, as a seller or landlord, have any doubts it is always sensible to get legal advice – however, the guide below gives an overview of the requirements.

What is an EPC?

An Energy Performance Certificate (EPC) can be commissioned by both owners and occupiers of a property, and it shows information about the energy efficiency of a property, including both whole buildings and building units.

When is an EPC required?

An EPC may be required in one or more of these circumstances:

  • an existing property is being sold, rented, or significantly altered
  • a new property is built
  • a property is subject to a Green Deal plan
  • an existing owner / occupier has undertaken work which will improve a property’s energy efficiency
  • for some properties, it is compulsory to display the EPC (e.g. public buildings).

When isn’t one required?

  • There is no requirement to commission a first EPC for a property which is not being sold, rented out or significantly altered.
  • There is no need to commission a replacement EPC for an existing EPC which is more than 10 years old.
  • A landlord is not required to commission a new EPC where the one provided to the tenant on the grant of the lease has ceased to be valid, if there has been no change of tenant.

How long is an EPC valid?

A valid EPC must have been entered onto the EPC register no more than 10 years before the date it is made available. However, this does not apply where the same property has a new EPC issued causing the earlier EPC to become redundant, and to properties affected by a Green Deal plan.

EPCs on sales / lettings

There are 3 obligations imposed when a property is sold or is let:

  • to commission an EPC before marketing, if there is no existing EPC;
  • to put the EPC rating in any property advertising
  • to make available to the buyer or tenant a valid EPC

These obligations do not apply to a new-build property where its first EPC is issued, however, they will apply when that property is sold or let by the person to whom the first EPC was issued.

When should an EPC be made available?

An EPC must be made available at the earliest of:

  • when information requested about the property is first made available
  • when a person views the property
  • otherwise at the earliest opportunity

If an EPC is not produced at any of these points, you must still do so, even if this is after completion.

EPC exemptions

Certain types of properties are exempt from the requirements of the EPC regulations and, save for properties due for demolition, are also exempt from the requirement to display an EPC in public buildings:

  • properties which do not have a roof or walls
  • properties which use no energy to condition the indoor climate
  • properties which are not designed or altered to be used separately
  • religious properties
  • temporary properties
  • industrial sites, workshops and non-residential agricultural properties with a low energy demand
  • stand-alone properties
  • buildings earmarked for demolition
  • certain listed buildings and buildings in conservation areas

Which transactions do not trigger EPC requirements on sales / lettings?

EPC regulations do not expressly exclude any types of property transaction, but guidance indicates that the following transactions are not considered to be a sale / letting:

  • lease renewals, extensions and surrenders
  • compulsory purchases
  • sale of shares in the company which owns the property
  • living accommodation at a workplace / tied to a job
  • not-for-value transactions.

Penalties and enforcement

Enforcing EPC regulations is carried out by Trading Standards Officers issuing penalty charge notices to those who fail to comply. There are limited excuses for non-compliance, and the penalty for failing to comply is currently set at £200 for a residential property and 12.5% of the rateable value of a commercial property (min/max penalty - £500/£5,000).

When can enforcement action be taken?

  • Officers may take an initial low key approach, providing information on your duty and time to comply.
  • A penalty charge notice will be given within 6 months of any breach or, in the case of a continuing breach, beginning with the last day of that breach.
  • Enforcement officers may request a copy of an EPC and / or recommendation report up to 6 months after the EPC was required. The dutyholder must comply within a week of that request. If no EPC was produced or displayed at the right time, the EPC must be commissioned late and a copy supplied within that week.

Get legal advice

EPC regulatory requirements are not always easy to follow and if you have any doubts it is always sensible to obtain legal advice to ensure you move forward in the correct way. For more information on EPCs, or if you are intending to sell or let your property, or if you are intending to take a lease of property, please contact Bhaven Chauhan in our Commercial Real Estate team on 0161 214 6186 / bhaven.chauhan@croftons.co.uk


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