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Does your business have an Energy Performance Certificate?

 

**IMPORTANT - The law relating to Energy Performance Certificates (or EPCs), and therefore the obligations of business sellers and their representatives, has now been clarified. Agents, brokers and private sellers alike will be bound by new statutory law from 6th April 2012**

When business owners, agents, brokers or landlords put a business or property up for sale or rent they must produce an EPC, which provides information on the energy efficiency and likely carbon dioxide (CO2) emissions from business premises or residential buildings. An EPC applies only to those business properties which have 'their own heating or conditioning units' and lasts for 10 years.

The penalty fee for not having an EPC ready to show prospective buyers or tenants is fixed at 12.5% of the rateable value of the relevant building. Penalties range between £500 and £5,000.

The law governing EPCs is the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2008. These regulations have been changed as follows:

  • An EPC (or written evidence that an EPC has been commissioned if you don't yet have an EPC) should be supplied as part of an advertisement listing to potential buyers as early as possible in the sales process. To that end an EPC, or written evidence that you have applied for one, should be obtained within seven (7) days of  marketing.
  • Brokers and agents must use "all reasonable efforts" to obtain the EPC - this applies to both residential buildings and commercial premises.
  • However, if sellers use all reasonable efforts to apply for an EPC within the 7 day period they have a further twenty one (21) days to obtain the certificate. Therefore all sellers must have an EPC in their possession within 28 days of the start of marketing.
  • Brokers/agents acting on behalf of sellers must satisfy themselves that an EPC has been commissioned by their clients before marketing the property or be at risk of being liable for a fine under the Regulations.
  • The entire EPC certificate should be attached to a business listing advert if possible, or if this isn't possible the asset graph (which shows the energy rating of the property) as a minimum must be attached.
  • Owners of commercial premises can obtain an EPC before they put their business up for sale - in fact we recommend obtaining one as soon as possible. However, the above legal obligations apply only when an owner decides to market their business premises for sale or lease.
  • All of the new rules above apply only to business premises that are marketed for sale or lease on or after 6th April 2012.

**END OF UPDATE**

From the 4th January 2009 it became a legal requirement for Sellers and Landlords of commercial buildings (Shops, Offices, Industrial units etc) to make available to prospective purchasers or tenants, an Energy Performance Certificate at the point of marketing. An Energy Performance Certificate (EPC) is intended to inform potential buyers or tenants about the energy performance of a building, so they can consider energy efficiency as part of their investment or business decision to buy or occupy that building. An EPC will provide an energy rating for a building which is based on the performance potential of the building itself (the fabric) and its services (such as heating, ventilation and lighting). The Certificate looks broadly similar to the energy labels now provided with many household appliances such as fridges and washing machines. Its purpose is to indicate how energy efficient a building is and the energy rating given on the certificate reflects the intrinsic energy performance standard of the building relative to a benchmark which can then be used to make comparisons with comparable properties. It is accompanied by a recommendation report, which provides recommendations on how the energy performance of the building could be enhanced, together with an indication of the payback period. This is all part of the UK’s commitment to tackling climate change.
 
What happens if I do not have an EPC?
 
The penalty for failing to make an EPC available to a prospective buyer or tenant is 12.5 % of the rateable value of the building, subject to a minimum penalty of £500 and a maximum of £5,000. An EPC will still have to be carried out.
 
How long are EPC’s valid for?
 
An EPC on a commercial building is valid for 10 years unless superseded by a more recent report.

 

 

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