We have updated this practice note to refer to the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2012 (SI 2012/809) that come into force on 5 and 6 April 2012.
This note explains the regime of energy performance certificates (EPCs), display energy certificates (DECs) and compulsory air-conditioning inspections introduced by the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007.
It also summarises the effect of Council Directive 2010/31/EU on the energy performance of buildings (recast).
For a consideration of the provisions of sale contracts, leases and leasehold management documents that may be negotiated to deal with EPCs for commercial properties, see Practice note, Energy performance certificates: negotiation issues.
NOTE ADDED (20.12.2012): The government announced changes to the EPC, DEC and air conditioning inspections regime, on 19 December 2012. This note is being updated to reflect the changes, which came into force on 9 January 2013. For more information, see Practice note, Changes to EPC regulations in January 2013 and Legal update, EPC regulations: destination table for 2012 regulations.
One of the main ways in which the EU and the government propose to tackle climate change and reduce emissions is through greater energy efficiency, including efficiency in buildings.
The building sector is thought to account for approximately 40% of the EU's total energy consumption and 50% of the UK's total carbon dioxide emissions (with residential buildings accounting for approximately 27% of the UK's total carbon dioxide emissions).
The Energy Performance of Buildings Directive (2002/91/EC) (the EPB Directive 2002) aims to promote improved energy performance of buildings (both commercial and residential) in the EU. It has significant implications for developers, owners, occupiers and managers of buildings.
The principal requirements of the EPB Directive 2002 are as follows:
Member states must set minimum energy performance requirements for buildings (Article 4).
New buildings, and large buildings which are subject to major renovations, must meet these minimum energy performance requirements (Articles 5 and 6).
A feasibility assessment of alternative heating and energy supply systems must be carried out before construction of a new large building (that is, a building with a total useful floor area of more than 1,000 square metres) (Article 5).
Energy performance certificates (EPCs) must be made available to prospective buyers and tenants whenever a building is constructed, sold or rented (Article 7).
Display energy certificates (DECs) must be displayed in large buildings occupied by public authorities and by institutions providing public services (Article 7).
Boilers and air conditioning systems in buildings must be inspected on a regular basis (Articles 8 and 9).
The issuing of EPCs and DECs and the inspection of boilers and air-conditioning systems must be carried out by independent experts (Article 10).
Council Directive 2010/31/EU on the energy performance of buildings (EPB Directive 2010) came into force on 8 July 2010. It replaces the EPB Directive 2002 from 1 February 2012. It:
EU member states are required to adopt legislation implementing it by 9 July 2012. The domestic legislation must take effect as follows:
For more information, see Practice note, EU Energy Performance of Buildings Directives 2002 and 2010 (www.practicallaw.com/0-381-4180). |
The EPB Directive 2002 required member states to implement the EPB Directive 2002 by 4 January 2006. Member states were given a further three years in which to bring some of the provisions into force, to allow time for sufficient energy assessors to be trained.
The government failed to meet the deadline of 4 January 2006 for putting in place all the necessary regulations, but the EPB Directive 2002 has now been implemented in England and Wales, in two stages:
Building and Approved Inspectors (Amendment) Regulations 2006 (SI 2006/652) (2006 Regulations).
The 2006 Regulations implemented Articles 3 to 6 of the EPB Directive 2002, which relate to minimum energy performance requirements, by amending the Building Regulations 2000 (BR 2000). The 2006 Regulations came into force on 6 April 2006. On 1 October 2010, the BR 2000 and the 2006 Regulations were consolidated into the Building Regulations 2010 (SI 2010/2214) (BR 2010).
For more information, see Practice note, EU Energy Performance of Buildings Directive 2002 (www.practicallaw.com/0-381-4180).
Energy Performance of Buildings (Certificates and Inspectors) (England and Wales) Regulations 2007 (SI 2007/991) (EPB Regulations 2007).
The EPB Regulations 2007 implement Articles 7, 9 and 10 of the EPB Directive 2002, which relate to energy certificates, inspection of air-conditioning systems and independent experts. For more information, see Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007 (SI 2007/991).
Member states were given two alternative ways to implement Article 8 of the EPB Directive 2002, which relates to the inspection of boilers:
The government has chosen to implement Article 8 using the second alternative, so no legislation is needed.
The EPB Regulations 2007, which implement Articles 7, 9 and 10 of the EPB Directive 2002, were laid before Parliament on 29 March 2007 and apply to commercial and residential buildings in England and Wales.
The EPB Regulations 2007 have been amended by:
The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2007 (SI 2007/1669) (EPB Amendment Regulations 2007) to take account of the delay in introducing Home Information Packs (HIPs).
The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment No. 2) Regulations 2007 (SI 2007/3302) (EPB Amendment No. 2 Regulations 2007) to delay the introductions of EPCs and DECs for some categories of property.
The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2008 (SI 2008/647) (EPB Amendment Regulations 2008) to introduce transitional arrangements for commercial properties.
The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment No. 2) Regulations 2008 (SI 2008/2363) (EPB Amendment No. 2 Regulations 2008).
The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2009 (SI 2009/1900) (EPB Amendment Regulations 2009).
The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2010 (SI 2010/1456) (EPB Amendment Regulations 2010) to ensure that, notwithstanding the suspension of HIPs, a seller of residential property is still required to provide the buyer with an energy performance certificate (EPC) and recommendations for improvement.
This Practice note refers to the EPB Regulations 2007 as amended by the above statutory instruments.
The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2011 (SI 2011/2452) (EPB Regulations 2011) come into force on 6 April 2012 and amend the EPB Regulations 2007. For more information, see Legal update, New energy performance certificate regulations published (www.practicallaw.com/8-509-3702).
The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2012 (SI 2012/809) (www.practicallaw.com/9-518-6277) (EPB Regulations 2012) come into force on 5 and 6 April 2012. They amend the EPB Regulations 2007, and partly revoke the EPB Regulations 2011 to reflect the changes (see Legal update, Regulations amending energy performance regulations 2007 published (www.practicallaw.com/4-518-5478).
The DCLG has published the following summaries of the changes taking effect in April 2012:
For information on the commencement of the EPB Regulations 2007, see Timetable for commencement.
The EPB Regulations 2007 contain four main requirements:
EPCs and recommendations for improvement of the energy performance of the building are to be produced whenever a building is constructed, sold or rented out. See Energy performance certificates (EPCs). The obligation to provide an EPC will not arise unless one of these triggers (construction, sale or renting out) occurs. Therefore, existing occupiers and tenants will not require an EPC unless they sell, assign or sublet their interest.
Display energy certificates (DECs) are to be displayed in larger buildings occupied by public authorities and by institutions providing public services to a large number of people. Advisory reports containing recommendations for improvement of the energy performance of such buildings must also be obtained. See Display energy certificates (DECs).
Air-conditioning systems with an output of more than 12kW must be inspected at regular intervals. See Inspection of air-conditioning systems.
The energy assessors who produce EPCs and DECs and inspect air-conditioning systems must be accredited. See Energy assessors.
An EPC is a certificate containing information about the energy efficiency of a building. The DCLG has developed a model form of EPC (www.practicallaw.com/6-270-5952) for use by energy assessors on the sales of dwellings.
The EPB Regulations 2007 do not prescribe the form of an EPC, but regulation 11 requires an EPC to include the following information:
The asset rating of the building.
The asset rating indicates the energy performance of the building's fabric and its services, calculated using standardised energy usage patterns. The asset rating is expressed on a scale from A to G, similar to the energy efficiency labels on domestic appliances, and allows prospective buyers or tenants to compare the energy performance of buildings. An A rating indicates that the building is very energy efficient, with G being the lowest rating.
For homes, an EPC includes the energy efficiency rating (on the A-G scale) and an environmental impact rating, which indicates the level of carbon dioxide emissions from the property.
A reference value.
A reference value is a benchmark against which the asset rating for a building can be judged. The DCLG model form of EPC (www.practicallaw.com/6-270-5952) states that the benchmark asset rating for an average dwelling in England and Wales is E.
On 1 July 2008, the DCLG announced (www.practicallaw.com/0-382-5169) that the average energy rating of the commercial buildings assessed since EPCs were extended to the commercial sector on 6 April 2008 was C.
The reference number under which the EPC is registered.
For more information on registration of EPCs, see Registration of certificates.
The address of the building.
Note: From 6 April 2012, the EPB Regulations 2012 provide that the building address of non-residential properties can be omitted from the first page of the EPC by the keeper of the register. An EPC from which the address has been omitted may only be attached to the written particulars of a non-residential property from which the address has been omitted. For more information, see Legal update, Regulations amending energy performance regulations 2007 published (www.practicallaw.com/4-518-5478).
the address of the building can be omitted from a copy of the first page of the EPC where the address has been omitted from written particulars (regulation 2(5)(e), EPB Regulations 2011).
An estimate of the total useful floor area of the building.
The EPB Regulations 2007 do not specify how the floor area of a building should be measured. Guidance issued by the DCLG, Improving the energy efficiency of our buildings: A guide to energy performance certificates for the construction, sale and let of non-dwellings (2nd edition) (www.practicallaw.com/9-382-7456) (EPCs Guidance), defines the total useful floor area as the total of all enclosed spaces measured to the internal face of the external walls. This is comparable to the definition of "gross internal area" in the RICS Code of Measuring Practice.
The name of the energy assessor who issued the EPC, together with the name and address of their employer, or, if the energy assessor is self-employed, the name under which they trade and their address.
The date on which the EPC was issued.
The name of the approved accreditation scheme of which the energy assessor is a member.
An EPC must be produced by an energy assessor who is accredited to produce EPCs for that category of building. For more information, see Energy assessors.
An EPC must not contain any information that identifies a living individual (other than the energy assessor and their employer). The aim of this is to protect the privacy of owners and occupiers, particularly from unsolicited marketing (regulation 11(6), EPB Regulations 2007).
The London Property Support Lawyers and Association of Property Support Lawyers have produced guidance (www.practicallaw.com/3-502-6300) on the application of the EPC regime to commercial property.
The requirements for EPCs are more complicated in relation to flats, buildings that are multi-let and mixed-use properties. The EPCs Guidance states that, in general terms, the EPC should reflect the extent of the space being offered for sale or rent.
In relation to flats, every dwelling must have its own EPC. An EPC can be produced for each flat based on an energy assessment of a representative flat in the same block (regulation 11(7), EPB Regulations 2007).
If a building is made up of separate commercial units, but has a common heating system, either:
one EPC can be prepared for the whole building (which can then be used when any part of the building is let or sold); or
an EPC can be prepared for the part of the building that is being offered for sale or rent. In such cases, the EPC can be based on an energy assessment of a representative unit in the same block. For more information on representative units, see Assessment of representative units.
In a mixed-use building with a common heating system, the commercial areas of the building can be assessed on a common EPC (regulation 11(8), EPB Regulations 2007).
If a building is made up of separate commercial units that do not share a common heating system, an EPC is required for each part of the building that is being offered for sale or rent. In such cases, the EPC can be based on an energy assessment of a representative unit in the same block. For more information on representative units, see Assessment of representative units.
Chapter 4 of the EPCs Guidance sets out examples of different uses and occupancy arrangements of properties and explains when an EPC is required in each example.
Anyone who has an interest in the building, or is in occupation of the building, is under a duty to:
Co-operate with the landlord to allow the landlord to comply with the duty to prepare an EPC and recommendation report.
Allow an energy assessor access where it is reasonably necessary for the purposes of preparing an EPC and recommendation report.
(Regulation 50, EPB Regulations 2007.)
The EPB Directive 2010 contains considerable additional detail on the contents of EPCs (article 11). Member states must adopt legislation to implement it by 9 July 2012. The domestic legislation must take effect by 9 January 2013.
In addition, the European Commission is required to adopt a voluntary EU certification scheme for the energy performance of non-residential buildings by 2011. Member states are encouraged to recognise or adopt all or part of this scheme.
When a seller or landlord is required to provide an EPC, the EPC must be accompanied by a recommendation report (regulation 10, EPB Regulations 2007). A recommendation report contains suggestions for the improvement of the energy performance of the building and is issued by the energy assessor who issued the EPC.
The recommendation report contains two categories of recommendation:
Cost-effective alterations to the building that would improve energy performance.
Measures that require a higher level of expenditure, including installation of renewable energy systems, which could be adopted to improve the building's energy performance.
The model form of EPC (www.practicallaw.com/6-270-5952) produced by the DCLG includes a sample form of recommendation report.
On 1 July 2008, the DCLG announced (www.practicallaw.com/0-382-5169) that since EPCs were introduced in the commercial sector on 6 April 2008, the top five recommendations made for buildings with a floor area over 10,000 square metres are:
Introducing more energy efficient lighting.
Introducing solar control measures (such as reflective coating or shades for windows) to reduce the demand for cooling.
Introducing electronic control gear to improve efficiency of fluorescent lighting.
Installing solar water heating.
Undertaking a review of boiler plant to look for energy efficiency improvements.
The EPB Directive 2010 contains considerable additional detail on recommendations for cost-optimal energy performance improvements. Recommendations should be included within the EPC, rather than accompanying the EPC (article 11). Member states must adopt legislation to implement it by 9 July 2012. The domestic legislation must take effect by 9 January 2013.
When a building is to be sold or rented out, the seller or landlord must provide any prospective buyer or tenant with a valid EPC and a recommendation report, free of charge, at the earliest opportunity (regulation 5, EPB Regulations 2007). It is sufficient for the seller or landlord to provide a copy of a valid EPC and an electronic copy is permissible if the recipient consents to receiving the certificate electronically.
The obligation to provide an EPC is triggered by whichever of these events occurs first:
The seller or landlord must ensure that the ultimate buyer or tenant has received a valid EPC.
Regulation 5(3) states that the obligation to provide an EPC does not apply if the seller or landlord has reasonable grounds to believe that a prospective buyer or tenant:
Although the EPB Regulations 2007 allow a seller or landlord to assess whether or not to provide an EPC in such circumstances, the EPB Regulations 2007 do not permit unlawful discrimination.
With effect from 6 April 2012, there will be an obligation to use all reasonable efforts to ensure that an EPC is obtained within seven days of marketing the building (although there will be an additional 21 day period during which the EPC can be obtained, if it has not been obtained within the initial seven day period). For more information, see Legal update, New energy performance certificate regulations published: EPC required on marketing for all properties (www.practicallaw.com/8-509-3702).
The EPCs Guidance confirms that selling includes the assignment of a lease and renting out includes the grant of a sub-lease. In the case of an assignment, the assignor should provide the EPC to the proposed assignee. Where a tenant proposes to sub-let its property, it may either:
The EPCs Guidance gives the following examples of transactions that are not considered to be selling or renting out:
Neither the EPB Regulations 2007 nor the EPCs Guidance clarify whether granting a licence to occupy a property amounts to renting out for the purposes of the EPC requirements.
For details of the DCLG's guidance regarding EPC requirements for holiday lets, see Legal update, EPC guidance for holiday lets published (www.practicallaw.com/9-505-9731).
Who bears the cost of producing an EPC is an issue that has been widely debated in the property industry. For a consideration of this issue, and other issues that may be negotiated in relation to EPCs, see Practice note, Energy performance certificates: negotiation issues (www.practicallaw.com/1-383-6068).
Before 21 May 2010, the seller of a residential property was required to provide an EPC and recommendations for improvement as part of the HIP. On 21 May 2010:
The duty to provide a HIP was suspended by the Home Information Pack (Suspension) Order (SI 2010/1455).
The EPB Amendment Regulations 2010 came into force with immediate effect.
The EPB Regulations 2007 contained provisions about EPCs that were framed by reference to HIPs. The EPB Amendment Regulations 2010 ensured that, despite the suspension (and subsequent abolition) of HIPs, sellers of residential property still have to provide buyers with EPCs and recommendations for improvement.
The EPB Amendment Regulations 2010 inserted a new regulation 5A into the EPB Regulations 2007 that imposes:
A new duty on the seller to commission an EPC before marketing the property. Previously the seller could not market the property unless a full EPC was available. The purpose of this change is to speed up transactions.
An EPC will be treated as commissioned when the seller:
instructs an energy assessor to prepare an EPC; and
has either paid for the EPC or given a clear undertaking to pay for it.
A new duty on the person acting on behalf of the seller to be satisfied that an EPC has been commissioned before commencing marketing.
A duty on both the seller and a person acting on its behalf to make reasonable efforts to obtain an EPC within 28 days.
As before, a duty that written for homes being marketed for sale include the asset rating or have the EPC attached. However, the timing has been changed so that this is only required once the EPC becomes available.
HIPs were formally abolished on 15 January 2012 by section 183 of the Localism Act 2011.
For further information, see Legal updates:
DCLG announcement: HIPs suspended but EPCs retained (www.practicallaw.com/5-502-3254).
Statutory instruments suspending HIPs and amending EPC regulations (www.practicallaw.com/0-502-3384).
Legal update, Localism Act 2011: second commencement order made (www.practicallaw.com/5-517-2748).
The EPB Regulations 2011 make further changes with effect from 6 April 2012:
There will be an obligation to use all reasonable efforts to ensure that an EPC is obtained within seven days of marketing the building (although there will be an additional 21 day period during which the EPC can be obtained, if it has not been obtained within the initial seven day period). However, residential properties marketed before 6 April 2012 can still rely on regulations 5 and 5A of the EPB Regulations 2007, as unamended (regulation 4, EPB Regulations 2011). Essentially, there is a grace period.
There will be a requirement to include a copy of the first page of the EPC, once it has been obtained, with written particulars. It will not be possible to include the asset rating only.
For more information, see Legal update, New energy performance certificate regulations published (www.practicallaw.com/8-509-3702).
The DCLG has published the following guidance to assist residential landlords: Energy performance certificates for dwellings in the social and private rented sectors: A guide for landlords (www.practicallaw.com/1-382-5003) (Guidance for Residential Landlords).
The Guidance for Residential Landlords advises that:
An EPC is only required for the letting of a building or part of a building that is "designed or altered to be used separately". For residential purposes, this means that the unit does not share any essential facilities (such as a bathroom, shower room, toilet or kitchen) with any other units, and that it has its own entrance, either from the outside or through common parts, but not through another dwelling. For example:
A house is let to several tenants who each have their own room but share a kitchen and bathroom. The tenants have separate contracts with the landlord for the parts they have access to. An EPC is not required when a new tenant moves in to the property.
A group of friends rent a whole house from the landlord. The group has a single contract with the landlord. If the group of friends move out and a new group moves in, an EPC is required.
Individual tenants rent rooms in a hall of residence. The rooms are not "designed or altered to be used separately". An EPC is not required for each individual room.
If the landlord already has an EPC for a property (for example, from when the landlord purchased the property) the same EPC can be used for subsequent lettings of the property.
An EPC is required on the first equity purchase of a shared ownership dwelling, but not for the purchase of subsequent equity.
The DCLG has issued separate guidance for landlords with large numbers of similar properties. See Assessment of representative units.
The EPB Regulations 2007 amended the Building Regulations 2000 to require a developer to produce an EPC when a building is erected or converted into fewer or more units and the services (for example, the heating, hot water or air-conditioning systems) in the building are modified (regulation 8 and Schedule 2, EPB Regulations 2007). This requirement replaced the requirement to produce an energy rating for new dwellings. From 1 October 2010, the BR 2000 and its related legislation (including the relevant provisions of the EPB Regulations 2007) were consolidated into the BR 2010. As a consequence, regulation 8 and Schedule 2 to the EPB Regulations 2007 were redundant and therefore revoked.
Unless an EPC and recommendation report have been given to the owner of the building by the developer, the building control inspector cannot issue a completion certificate for the works.
Certain buildings are not subject to the BR 2010, but are still within the scope of the EPB Regulations 2007. In such cases, the person who carries out the construction work must give the owner of the building an EPC and recommendation report within five days of completing the construction work (regulation 9, EPB Regulations 2007).
The EPCs Guidance confirms that an internal refit with new heating, hot water, air conditioning or mechanical ventilation would not trigger the requirement for an EPC, unless the building were also converted so as to comprise more or fewer units for separate use.
The EPB Regulations 2007 do not require an EPC to be provided for off-plan sales or lettings before the construction of the building has been completed. However, prior to 21 May 2010, the Home Information Pack (No. 2) Regulations 2007 (HIPs (No. 2) Regulations 2007) imposed obligations relating to new-build properties. Where a property was marketed before it was physically complete, if a HIP was required, the HIP had to include a predicted energy assessment (PEA). Once the building was constructed, the PEA was replaced by an EPC (regulation 8(c) and Schedule 2, HIPs (No. 2) Regulations 2007).
Following the suspension of the requirement for HIPs, it was not clear what was required when selling residential properties that were not complete and in respect of which no EPC could be produced. There does not appear to be any legislative basis for requiring a PEA. We sought clarification from the DCLG, and it initially informed us that the seller should provide PEAs and EPCs in the same way as before. However, the DCLG later informally confirmed that the requirement to provide a PEA was suspended as the obligation was imposed by the HIPs regime (and is now therefore presumably abolished). An EPC still needs to be produced once the building is completed.
It will continue to be the case that an EPC must be provided when a building is being constructed, rented or sold (articles 12(1)(a) and (2)). In addition, an EPC will be required for buildings where a total useful floor area exceeding 500 square metres (reducing to 250 square metres on 9 July 2015) is occupied by a public authority and frequently visited by the public (article 12(1)(b)).
The EPB Directive 2010 also provides that, where a building is sold or rented out in advance of construction, member states may require the seller to provide an assessment of its future energy performance. In this case, the EPC shall be issued at the latest once the building has been constructed (article 12 (3)).
Member states must adopt legislation to implement article 12 by 9 July 2012. The domestic legislation must take effect by 9 January 2013.
Member states may defer the application of articles 12(1) and (2) to single building units that are rented out, until 31 December 2015 (provided that this does not result in fewer EPCs being issued than would have been the case under the application of EPB Directive 2002).
The EPB Regulations 2007 define a building as "a roofed construction having walls, for which energy is used to condition the indoor climate". This would include buildings that have fixed heating, mechanical ventilation or air conditioning. However, buildings that only have hot water or electric lighting do not fall within the EPB Regulations 2007, so do not require an EPC.
Regulation 4 of the EPB Regulations 2007 states that an EPC is not required on construction, sale or rent of any of the following types of building:
The EPCs Guidance states that this exemption covers buildings whose purpose is to accommodate industrial activities in spaces where the air is not fully heated or cooled. This may include foundries, forges, food and drink packing plants, storage and warehouses. Such buildings may have local heating or cooling appliances to serve people at work stations.
According to the EPCs Guidance, this exemption covers buildings that are heated for a few days each year to enable plants to germinate but are otherwise unheated.
The obligations to provide an EPC and to include the asset rating in marketing particulars do not apply to buildings that are to be demolished (regulation 7, EPB Regulations 2007). The EPCs Guidance states that where a building is to be demolished, the seller or landlord must be able to show that:
The building is being sold or rented with vacant possession.
The building is suitable for demolition and the site is suitable for redevelopment.
They have reasonable grounds to believe that a prospective buyer or tenant intends to demolish the building. Evidence of this intention would include an application for planning permission.
The general rule is that an EPC is valid for ten years from the date on which it was issued (regulation 11(3), EPB Regulations 2007).
Prior to 21 May 2010, an EPC provided to a buyer of a residential building was only valid for three years from the first date of marketing. The EPB Amendments Regulations 2010 extended its validity to ten years from the date on which it was issued.
A valid EPC for a building will be revoked if a new EPC is issued for the building. This could be a concern where both the landlord and the tenant may be commissioning an EPC of the building. However, if an EPC is produced for part of a building, it will not revoke a previous EPC for the whole of the building, and vice versa. For example, if the landlord had obtained an EPC for the whole of an office block and a tenant subsequently obtained an EPC for the second floor, the landlord's EPC would remain valid for use in transactions relating to the whole building or any part of the building, except the second floor.
Anyone can ask the keeper of the register of certificates (see Registration of certificates) whether an EPC has been registered for a specific commercial property, and the date of issue of the EPC (regulation 34A, EPB Regulations 2007). This provision allows landlords, tenants or prospective purchasers to find out whether an EPC exists for a property, but it does not allow them to obtain a copy of the EPC.
The EPCs Guidance states that an energy assessor will require the following information to produce an EPC:
Details of the individual spaces or zones in use within a building and their dimensions.
The activities conducted within the zones. For example, retail space, office space, kitchen or storage.
The heating and ventilation services for each zone, including details of the type of system, metering, controls and fuel used.
The lighting and controls used for each zone.
The construction of the fabric of the building and the thermal efficiency of the materials used.
If plans for the building are not available, the energy assessor will need to survey the building. Even where plans are available, the energy assessor may need to inspect the building to verify information.
EPCs for flats or units in a block can be based on an assessment of another unit in the same block (see Blocks of flats and multi-let buildings). The EPCs Guidance states that what makes one unit representative of another will be down to the judgement of the energy assessor. Material factors may include the age and construction of the property, orientation, position within the block, type of heating, insulation and glazing.
The DCLG has issued guidance on producing EPCs for portfolios of similar residential properties: Energy performance certificates for dwellings in the social and private rented sectors: A guide to generating Energy Performance Certificates for similar dwellings owned by the same landlord (www.practicallaw.com/7-382-7476). This guidance covers:
A "common values" approach, which involves producing an EPC for one property using data from a similar property that has been amended to account for differences between the properties.
Sampling and multiple certification, under which EPCs for a group of properties are produced following a survey of a sample, where it can be shown that the dwellings are similar enough to make this approach valid.
How to obtain an overview of the energy efficiency of housing stock from sample EPCs.
The EPB Directive 2010 provides that certification for single-family homes may be based on the assessment of another representative building of similar design and size with a similar actual energy performance quality if the expert issuing the EPC guarantees that the other building is representative (article 11(7)).
Member states must adopt legislation to implement article 11 by 9 July 2012. The domestic legislation must take effect by 9 January 2013.
From 1 October 2008, occupiers of certain buildings are required to show a display energy certificate (DEC) in a prominent place (regulation 16, EPB Regulations 2007). The aims of this requirement are to enable the public to compare the energy performance of public buildings and to promote improved energy use.
In May 2008, the DCLG issued guidance on DECs: Improving the energy efficiency of our buildings: A guide to display energy certificates and advisory reports for public buildings (www.practicallaw.com/8-381-7537) (DEC Guidance). The DEC Guidance recommends that the DEC should be displayed in the entrance or reception to the building and be no smaller than A3 in size.
A collation of all the DECs in England and Wales obtained under the EIR can be found here on the Centre for Sustainable Energy: open data (www.practicallaw.com/2-505-5374).
The requirement to display a DEC only applies to "buildings with a total useful floor area over 1,000 square metres occupied by public authorities and by institutions providing public services to a large number of persons and therefore frequently visited by those persons" (regulation 16, EPB Regulations 2007).
Article 13 of the EPB Directive 2010 will lower the threshold from 1,000 square metres to 500 square metres (reducing to 250 square metres on 9 July 2015). It does not distinguish between EPCs and DECs, but provides that an energy performance certificate must be clearly displayed to the public.
In addition, where an energy performance certificate has been obtained for private buildings where a total useful floor area exceeding 500 square metres is frequently visited by the public, this must be displayed. This means that premises that are open to the public such as shops and cinemas may be affected.
Member states must adopt legislation to implement this by 9 July 2012. The domestic legislation must take effect by 9 January 2013. However, the government states in its Carbon Plan that DECs should be required for commercial buildings by October 2012 (see Legal update, Government consults on draft Carbon Plan of its climate change actions (www.practicallaw.com/5-505-1218)).
The DEC Guidance considers each element of regulation 16:
For the purposes of regulation 16, a "building" includes part of a building that is designed or altered to be used separately.
The EPB Regulations 2007 do not specify how the floor area of a building should be calculated. The DEC Guidance defines the total useful floor area as the total of all enclosed spaces measured to the internal face of the external walls. This is comparable to the definition of "gross internal area" in the RICS Code of Measuring Practice.
The DEC Guidance lists the following bodies as being within the definition of "public authorities":
The DEC Guidance states that an institution providing a public service is one providing a service traditionally provided by local or national government, or traditionally funded by the taxpayer. To decide whether an institution provides a public service, it should be considered whether:
The services are not likely to be public services if the institution is autonomous, the service has never been provided by government, the government is not under a duty to provide the service and the provision of the service is not funded or planned by government.
A DEC should be provided if a building is provided for the public to visit to receive a public service or in connection with a public service. The DEC Guidance lists the following buildings as being those that may be affected:
If a building is only likely to be visited by employees or for deliveries and maintenance work, a DEC will not be required for that building.
Chapter 5 of the DEC Guidance provides some useful examples to follow when establishing whether a building requires a DEC, including where:
The DCLG has published separate guidance on producing DECs for buildings on a site or campus: Display Energy Certificates and Advisory Reports: Transitional arrangements for buildings on a site or campus (www.practicallaw.com/6-382-9126). The guidance sets out transitional arrangements that apply where a collection of buildings in the same vicinity is occupied by the same organisation, such as a school campus or a hospital site, and the buildings share energy meters. In such cases, the transitional arrangements allow for the production of a site-based DEC and a site-based advisory report (see Advisory reports) instead of requiring individual DECs and advisory reports for each building on the site. These transitional arrangements were due to be reviewed in 2009.
The EPB Regulations do not prescribe the form of a DEC, but regulation 17 requires DECs to include the following information:
The operational rating of the building.
The operational rating will be assessed from meter readings for the services provided to the building. Different types of fuel emit different amounts of carbon dioxide. The amount of energy used in the building (according to the meter readings) will be converted into an amount of carbon dioxide, to provide a common basis on which the energy performance of each building can be compared. The operational rating shows the level of carbon dioxide emissions from the building over a period of 12 months. The operational rating is shown on a scale from A to G, where A is the lowest amount of carbon dioxide emissions.
If the occupier has displayed DECs in the previous two years, the operational rating for the building in those two years must be shown in the current DEC.
The asset rating of the building.
The asset rating indicates the energy performance of the building's fabric and its services and will be expressed on a scale from A to G. An A rating indicates that the building is very energy efficient. The requirement to include an asset rating in the DEC is subject to regulation 18 (see Exceptions for new occupiers).
A reference value.
A reference value is a benchmark against which the asset rating for a building can be judged. The benchmark is the average energy performance of a hypothetical building of the same type.
The reference number under which the DEC is registered.
For more information on registration of DECs, see Registration of certificates.
The address of the building.
The total useful floor area of the building.
The name of the energy assessor who issued the DEC, together with the name and address of their employer. If the energy assessor is self-employed, the name under which they trade and their address.
The date on which the DEC was issued.
The nominated date.
The nominated date must fall within three months of the end of the period over which the operational rating is calculated. The nominated date is chosen by the energy assessor. A DEC is valid for 12 months from the nominated date, rather than from the date on which the DEC is issued.
The name of the approved accreditation scheme of which the energy assessor is a member.
A DEC must be produced by an energy assessor who is accredited to produce DECs for that category of building. For more information, see Energy assessors.
Regulation 18 of the EPB Regulations 2007 contains some exceptions for new occupiers of buildings where a DEC is required. Chapter 1 of the DEC Guidance includes a flow chart that may be used to apply regulation 18 (see Display energy certificates flowchart (www.practicallaw.com/2-381-9469)).
As well as displaying a DEC, occupiers must also obtain an advisory report containing recommendations for improving the energy performance of the building. The advisory report is valid for seven years from the date it was issued and must be issued by an energy assessor who has assessed the building. The intention is that occupiers will take account of the recommendations made in the advisory report when planning any refurbishment or maintenance work.
Part 4 of the EPB Regulations 2007 imposes an obligation on those who have control of air-conditioning systems (with a maximum calorific output of more than 12kW) to ensure that the system is inspected at least every five years by an energy assessor.
The energy assessor must provide a written report of the inspection as soon as practicable after the inspection. From 6 April 2012, the energy assessor must also lodge the report on the central EPC register. For more information, see Legal update, New energy performance certificate regulations published: Air conditioning reports (www.practicallaw.com/8-509-3702).
The report must include:
An assessment of the air-conditioning efficiency of the system.
An assessment of the size of the system compared to the cooling requirements of the building.
Appropriate advice on possible improvements to the system (including replacement of the system and alternative solutions).
The requirement to have an air-conditioning system inspected is being introduced in stages from 1 January 2008:
If the system was put into service after 1 January 2008, the first inspection must take place within five years of the system being put into service.
If the system was in service before 1 January 2008, the date of the first inspection depends on the output of the system:
systems with an output of more than 250 kW must have been inspected by 4 January 2009;
systems with an output of more than 12 kW must have been inspected before 4 January 2011.
The DCLG has published detailed guidance on air-conditioning inspections: Improving the energy efficiency of our buildings: A guide to air-conditioning inspections for buildings (www.practicallaw.com/1-382-8426).
The requirements are more comprehensive. Inspections will be required for heating systems, rather than just boilers (articles 14-16). Member states must adopt legislation to implement it by 9 July 2012. The domestic legislation must take effect by:
9 January 2013 for buildings occupied by public authorities.
9 July 2013 for other buildings.
Any energy assessor who issues an EPC or DEC, or inspects an air-conditioning system, must be a member of an accreditation scheme approved by the Secretary of State (regulation 25, EPB Regulations 2007).
The approval of an accreditation scheme can be limited by reference to:
The categories of building for which members may produce certificates.
The types of air-conditioning systems members may inspect.
Accreditation schemes must ensure that energy assessors are properly qualified to carry out energy assessments in an independent and accurate manner. They must also provide a standard form of EPC, recommendation report, DEC and advisory report, which energy assessors should follow when preparing the different types of document.
On 10 January 2008, the government announced its approval for 12 accreditation schemes. For details of the accredited schemes, see Approved accreditation schemes (DCLG) (www.practicallaw.com/7-380-0797).
Details of accredited energy assessors can be found here (www.practicallaw.com/7-376-3988).
Part 6 of the EPB Regulations 2007 requires the Secretary of State to maintain registers of EPCs, DECs, recommendation reports and advisory reports. From 6 April 2012, air-conditioning inspection reports will also need to be lodged onto the central EPC register (see Legal update, New energy performance certificate regulations published: Air conditioning reports (www.practicallaw.com/8-509-3702)).
The responsibility for registering a document lies with the energy assessor who issued the document. Once a document has been registered it cannot be altered and must be stored on the register for at least 20 years.
Landmark Information Group operates the register (www.practicallaw.com/7-376-3988) on behalf of the government.
The aims of the register are:
To allow owners and occupiers to obtain additional copies of the EPC for their property.
To enable prospective purchasers, tenants and enforcement bodies to check that any EPC provided to them is valid.
To enable accreditation scheme operators to carry out quality checks on the EPCs produced by their energy assessors.
To allow the government to use the data to improve energy performance benchmarks and for statistical and research purposes.
To allow the DCLG to monitor compliance with the EPB Regulations 2007.
Registered EPCs are given a reference number, which must be quoted before a copy of the EPC will be provided. This measure is intended to limit public access to the register and protect the privacy of building owners and occupiers. It is a criminal offence to unlawfully disclose an EPC, punishable by a fine of up to £5,000 (regulation 14, EPB Regulations 2007).
The circumstances in which information on the register may be disclosed are prescribed in regulations 14(2) and 33-37 of the EPB Regulations 2007. Following consultation (see Legal update, Consultation and guidance on EPCs (www.practicallaw.com/3-382-5182)), these circumstances have been extended by the EPB Amendment Regulations 2008 and the EPB Amendment No. 2 Regulations 2008. The EPB Amendment Regulations 2009 have further amended the circumstances in which information may be disclosed (see Legal update, Disclosing EPCs to the Energy Saving Trust (www.practicallaw.com/3-386-8416)).
In March 2010, the DCLG published a consultation, Making better use of Energy Performance Certificates and data (www.practicallaw.com/5-501-6729). One of the consultation proposals included extending and managing access to EPC data. On 28 January 2011, DCLG published Making energy performance certificate and related data publicly available: Privacy impact assessment (www.practicallaw.com/0-504-6955), which assesses the impact on the privacy of individuals on making the data contained in EPCs, DECs and air conditioning reports available to everyone. For more information, see Consultation on improving the use of energy performance certificates (www.practicallaw.com/3-259-4960).
The local weights and measures authority in each area is responsible for enforcing the EPB Regulations 2007. Enforcement will normally be carried out by Trading Standards Officers issuing penalty charge notices to those who fail to comply.
The level of the penalty charge varies according to the type of property. For example, the penalty for failing to comply with the EPB Regulations 2007 when selling or renting out a dwelling is currently set at £200. The penalty for failing to provide an EPC when selling or renting out commercial property is, in most cases, 12.5% of the rateable value of the building, with a minimum penalty of £500 and a maximum penalty of £5,000.
The EPCs Guidance advises that a penalty charge notice will not be issued in the following circumstances:
On the sale or rent of a property where a request for an EPC was made at least 14 days before it was required but, despite all reasonable efforts, it is not in the possession of the seller or landlord. Evidence of the request for an EPC will be needed to rely on this exemption.
On the renting out of a property:
where a prospective tenant was seeking to rent the building in an emergency that required their urgent relocation;
the landlord did not have a valid EPC at the time of the letting;
there was insufficient time for the landlord to be reasonably expected to have obtained an EPC before renting out the building; and
the landlord has given a valid EPC to the tenant as soon as reasonably practicable after the building was rented out.
A penalty charge notice may only be given within a period of six months beginning with the day on which the breach of duty was committed or, in the case of a continuing breach, beginning with the last day of that breach.
The EPCs Guidance states that enforcement officers can request a copy of an EPC from a dutyholder up to six months after the EPC was required. It is therefore prudent for the dutyholder to keep a record of the reference number for the EPC, to allow further copies to be requested in the future (see Registration of certificates).
The key dates on which the duties imposed by the EPB Regulations 2007 come into force are as follows:
Date coming into force | Duties coming into force |
1 August 2007 for properties with four or more bedrooms 10 September 2007 for three bedroom properties 14 December 2007 for one and two bedroom properties | EPCs required for the sale of existing homes where the HIPs (No. 2) Regulations 2007 apply (other than homes built to the energy efficiency standards set out in the 2006 Regulations). At this time, HIPs were not required if a property was not marketed for sale. Energy efficiency information to be provided with the marketing particulars of properties where the HIPs (No. 2) Regulations 2007 apply. |
1 January 2008 | Air-conditioning inspections introduced. |
6 April 2008 | EPCs required on construction for all new dwellings. EPCs required for the construction, sale or renting out of non-dwellings with a total useful floor area over 10,000 square metres. The EPCs Guidance states that where contracts for the sale or rent of a property were exchanged before 6 April 2008, the duty to provide an EPC will not apply. Until 4 January 2009, transitional arrangements applied to commercial properties of over 10,000 square metres that were on the market before 6 April 2008 and remained on the market at that date. In such cases, the seller or landlord did not need to commission an EPC until contracts for the sale or rent of the property had been exchanged. However, once contracts were exchanged, the seller or landlord had to make reasonable efforts to obtain an EPC as soon as possible. (Regulation 51, EPB Regulations 2007). |
1 July 2008 | EPCs required for the construction, sale or renting out of non-dwellings with a total useful floor area over 2,500 square metres. The EPCs Guidance states that where contracts for the sale or rent of a property were exchanged before 1 July 2008, the duty to provide an EPC will not apply. Until 4 January 2009, transitional arrangements applied to commercial properties of over 2,500 square metres that were on the market before 1 July 2008 and remained on the market at that date. In such cases, the seller or landlord did not need to commission an EPC until contracts for the sale or rent of the property had been exchanged. However, once contracts were exchanged, the seller or landlord had to make reasonable efforts to obtain an EPC as soon as possible. (Regulation 51, EPB Regulations 2007). |
1 October 2008 | EPCs required for the sale and rent of dwellings that were not previously affected. Examples of such properties include a non-marketed private sale between individuals, a portfolio sale of homes, or a Right to Buy sale to a social housing tenant. EPCs required for the construction, sale and rent of remaining buildings that are not dwellings. Until 4 January 2009, transitional arrangements applied to commercial properties of less than 2,500 square metres that were on the market before 1 October 2008 and remained on the market at that date. In such cases, the seller or landlord did not need to commission an EPC until contracts for the sale or rent of the property had been exchanged. However, once contracts were exchanged, the seller or landlord had to make reasonable efforts to obtain an EPC as soon as possible. (Regulation 51, EPB Regulations 2007). Certain properties remain exempt from the EPC requirements, even after the transitional arrangements expire. See Which buildings do not require an EPC?. DECs required in buildings with a total useful floor area over 1,000 square metres that are occupied by public authorities and by institutions providing public services to a large number of persons where the public frequently visit the building. |
4 January 2009 | Deadline for the possession of a valid report following the first inspection of all existing air-conditioning systems with an output of more than 250 kW. |
4 January 2011 | Deadline for the possession of a valid report following the first inspection of remaining air-conditioning systems with an output of more than 12 kW. |
8 July 2010 | EPB Directive 2010 came into force. It replaces the EPB Directive 2002 from 1 February 2012. |
6 April 2012 | There will be an obligation to use all reasonable efforts to ensure that an EPC is obtained within seven days of marketing the building (although there will be an additional 21 day period during which the EPC can be obtained, if it has not been obtained within the initial seven day period). |
9 July 2012 | EU member states are required to adopt legislation implementing the EPB Directive 2010 by 9 July 2012. The domestic legislation must take effect as follows:
For more information, see Practice note, EU Energy Performance of Buildings Directives 2002 and 2010 (www.practicallaw.com/0-381-4180). |
The government has announced proposals to increase the availability of grants for home improvements aimed at increasing energy efficiency. For more information, see:
There is no standard definition of a green mortgage, but some lenders offer a discounted interest rate for energy efficient homes or for loans to make energy efficiency improvements. The government announced in September 2006 that it is considering introducing measures that would link EPCs to green mortgages and schemes run by energy companies. These incentives would give homebuyers cash payments to enable them to make energy saving alterations to their homes.
A number of local authorities in England have already piloted schemes with energy companies whereby council tax rebates are offered to people who make energy saving alterations to their homes.
For further information on these proposals, see:
The British Property Federation (BPF) has launched a project to enable property owners to create a Landlord's Energy Statement (LES) for their buildings. An LES allows landlords to summarise their energy use and calculate the carbon dioxide emissions from their buildings' services, such as heating, lighting, lifts and air-conditioning in the common parts. The project was designed to help landlords to prepare for the introduction of EPCs and DECs.
For more information, see Landlord's energy statements (BPF) (www.practicallaw.com/5-350-9955).
On 2 March 2010, the DCLG issued a consultation, Making better use of Energy Performance Certificates and data (www.practicallaw.com/5-501-6729).
In November 2010, the DCLG published a summary of responses and next steps. The table below summarises the position:
Matters for consultation | Government's next steps |
Extending and managing access to EPC data. | To make all EPC data publicly available. |
Requiring EPCs for houses in multiple occupation when rooms are rented out. | Not to take this forward. |
Requiring EPCs for short-term holiday lets. | Government proposes that an EPC will be required for buildings rented out as holiday lets for 4 months or more in any 12 month period. For details of the DCLG's guidance regarding EPC requirements for holiday lets, see Legal update, EPC guidance for holiday lets published (www.practicallaw.com/9-505-9731). |
Requiring property adverts to show the EPC rating. | Government will not take this forward until July 2013. |
Extending the use of display energy certificates to commercial buildings. | Government will work with industry to promote a voluntary approach. It will explore how this can be taken forward in the future. |
Requiring the lodgement of air conditioning reports. | Government will take forward this proposal. |
Clarifying when an EPC is required on the sale or letting of buildings | Government is considering whether this proposal should be taken forward. |
For more information, see: