EPC’s (Energy Performance Certificate) – A necessary document

There is always documentation you need being an investor and an EPC is definitely on that list. AN ENERGY PERFORMANCE CERTIFICATE IS NEEDED WHENEVER A BUILDING IS BUILT, SOLD OR RENTED, commercial or residential.

So you will need to provide one when you rent out your property for marketing purposes. The good news is that if you have just brought your property, the seller would have had to have obtained one so the agent should have a copy, if not search EPC Register website:

http://www.epcregister.com/

WHAT?

Here is an example of what an EPC should look like and some of the data you should receive:

EPC

HOW?

EPC’s are valid for 10 years, on expiry you will need to get a new one. Your best bet is to ask your lettings agent to get one produced for you, or check the EPC Register site for suggestions of contractors that could carry this out for you – roughly you should expect to pay £60 for a residential EPC and £200 for a commercial EPC (always ask for a quote and shop around if you have time).

WHY?

EPC’s were introduced under The Housing Act 2004 as part of Home Information Packs, which have since been abandoned. The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2012 (the EPB Regulations) (updated from the 2007 regulations) are the Regulations which now deal with the duties to provide EPC’s. It aims to reduce the level of carbon emissions from public buildings by 2018 and all new buildings by 2021.

EPC’s are a legal requirement and have been since October 2008, it gives information of how energy efficient a property is which is useful for potential occupiers as it gives an indication of how affordable gas and electricity bills will be. Efficiency will be rated on a scale from A to G, alongside this a recommendation report will also be given as to how efficiency can be increased.

WHEN?

An EPC should be obtained prior to the marketing of a property. You (or your Agent) can begin marketing without an EPC but an instruction must have been given for an EPC to be carried out and the intention must be provable either through an upfront payment to the contractor or an agreement to pay for one – this must be within 7 days of the property going on the market.

WHERE?

COMMERCIAL – As well as displaying it with marketing particulars an EPC must appear on the building if the total usable floor area is over 500sq m, the building is frequently visited by the public and an EPC has already been produced for the building’s sale, rental or construction.

RESIDENTIAL – An EPC should be made available within 28 days of a property appearing on the market – it should be displayed with the marketing particulars.

Fines:

COMMERCIAL – You can be fined between £500 and £5,000 based on the rateable value of the building if you don’t make an EPC available to any prospective buyer or tenant.

RESIDENTIAL – The penalty is £200

NEW UPDATES

New legislation has been brought in to bring the Energy Act 2011 into force from 2018, so watch out for this:

  • 1st April 2018 – All buildings will need to achieve an E rating or higher- whether let under a new tenancy to a new tenant; or let under a new tenancy to an existing tenant where there is an EPC registered.
  • Only buildings required to have an EPC under the existing EPC regulations will be covered – this does not apply to listed buildings.
  • Exemptions apply for certain types of property in certain circumstances – ask your EPC contractor for advice
  • Exemptions will apply where the value of the property will reduce by more than 5% as a result of the energy efficiency works and evidenced by a valuation from an RICS registered valuer.

Updates for Commercial Property:

  • From 1 April 2023 the minimum standard of an E will apply to all existing tenancies where there is an EPC
  • Failure to meet the standard will result in a penalty of either 10% or 20% of the Rateable Value of the property with a minimum fine of £5,000 and a maximum fine of £150,000.

Updates for Residential Property:

  • From 1 April 2020 the minimum standard of an E will apply to all existing tenancies where there is an EPC.
  • Failure to meet the standard will result in a penalty of either £2,000 or £4,000
  • The regulations apply to all properties let under an AST, a Rent Act tenancy and the agricultural versions of both.
  • The tenant can request that the Landlord carry out improvement works. The landlord will only be required to consent to works that are cost effective measures under the Green Deal and therefore cannot be forced to pay for works that could not be funded through a scheme such as the Green Deal.

The long and short of it is – make sure you have an up to date EPC for each of your properties in your records.