For anyone selling or letting commercial property, there was now one more document to have ready before marketing. From 1 October 2008 an Energy Performance Certificate, or EPC, was required on the construction, sale or letting of all commercial buildings in England and Wales. The requirement had been phased in since April 2008, starting with the largest buildings, and on 1 October 2008 it reached every size.
What an EPC is
An EPC rates the energy performance of a building on a scale from A to G, based on its fabric, its heating, cooling and lighting, and how it is designed to be used. It comes with a recommendation report suggesting improvements. There is no legal obligation to carry out the recommendations, but buyers and tenants will see them. The certificate is generally valid for ten years.
The rules are in the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007.
What owners and landlords should do
- Check which buildings will be sold or let soon, including units falling vacant at lease end, and commission EPCs in good time.
- Provide accurate information to the assessor, including drawings and details of heating, cooling and lighting systems. Assumptions in place of facts tend to lower the rating.
- Read the recommendations alongside your maintenance plan. Some improvements, such as better controls or lighting, can be done cheaply when other work is already planned.
EPCs and the end of a lease
When a tenant leaves, a landlord usually wants to relet quickly. The handback is a good moment to think about energy performance: what condition the services are in, what the tenant must reinstate under the lease, and what the landlord may choose to upgrade before marketing. A dilapidations schedule that is clear about repair and reinstatement helps the landlord separate those obligations from its own improvements.
Why it matters
At that stage the EPC was mainly about information. But it put energy performance in front of every buyer and tenant, and owners who understand the rating of their buildings will be better placed to keep them attractive and lettable.
See our Building Surveys and Defect Diagnosis and Dilapidations services, and how we handled a dilapidations claim on East London offices.