Energy Performance Certificates for all commercial buildings

With the government’s continuing efforts to reduce carbon emissions and energy consumption in the UK, Energy Performance Certificates (EPCs) are to be rolled out to all residential and commercial buildings this year.

The new certificate

The certificate’s purpose is to record how energy efficient a property is and it will provide a rating of the energy efficiency and carbon emissions of a building from A to G, where A is very efficient and G is very inefficient.

An EPC should allow the energy efficiency of buildings to be compared easily with others. The scheme is purported to allow ‘prospective buyers, tenants, owners, occupiers and purchasers to see information on the energy efficiency and fuel costs as part of their investment’ prior to occupation.

Eventually all commercial property which is either built, sold or rented will be subject to a Energy Performance Certificate.

EPCs are being introduced gradually;

-         From 6^th April 2008 EPCs are required on the construction of all dwellings and on the construction, sale or rent of buildings, other than dwellings, with a floor area over 10,000m².

-         From 1^st July 2008 EPCs will be required for the construction, sale or rent of buildings, other than dwellings, with a floor area over 2,500m².

-         And finally from 1^st October 2008 EPCs will required on the sale or rent of all remaining dwellings and on the construction, sale or rent of all remaining buildings other than dwellings.

Effects on those running businesses

All those running businesses from commercial premises and any commercial or residential landlord need to be aware of the new EPC scheme as it may potentially affect the value of those premises and the terms on which they are let.

From a landlord’s point of view a bad score on an EPC may force a reduction in the rents at which the premises are let. These cuts may be necessary to ensure the premises continue to compete adequately with similar premises receiving a higher score. Alternatively the results of an EPC may force a landlord to further invest into the premises with a view to improving its energy efficiency, although many improvements may be difficult and/or unrealistic in old buildings.

Sandersons ensure that there are adequate clauses in their new commercial leases to protect landlords from the ongoing affects of the EPC i.e preventing a tenant from in anyway decreasing the EPC standard of your property.

For a tenant renting commercial property you will need to understand the contents of an EPC to obtain the most from them and also ensure any new terms in your lease regarding the energy efficiency of the building are reasonable given the new regime.

Sandersons are actively dealing with the developments in this area of law by adopting new clauses in their commercial leases.

If you would like to find out more about these new considerations and the effect that an EPC may have on your business please contact the commercial property department at Sandersons.

Sandersons Solicitors

17-19 Parliament Street

Hull

HU1 2BH 

Tel:       01482 324662

Fax:      01482 223110

e-mail:  enquiries@sandersonssolicitors.co.uk

 Source: Federation of Small Businesses, May 2008