Energy Performance Certificates

Following on from our August 2008 briefing, we would like to provide an update now that the implementation of the European Union Directive designed to promote the improvement of energy performance of new and existing buildings in the form of Energy Performance Certificates (EPCs) is well under way.

Who prepares the EPC and when to have it done

It is the responsibility of the landlord or seller to produce, and pay for, the EPC. If you are a seller or landlord, we would advise having an EPC in place when starting to market a property, as a purchaser or tenant will likely require sight of this prior to entering into any binding contract. The European Directive requires that only qualified or accredited persons acting independently carry out the EPCs and we would be happy to put you in to contact with someone accredited to provide the report.

Costs

The cost of the EPC varies significantly depending on the amount of time and effort required to produce it, e.g. size and complexity of the building and the number of heating/cooling systems within the building. The costs could vary from around £100 for a small residential property to several thousand pounds for a large and complex commercial property. Ensuring you receive the EPC for a property is particularly important if you are a purchaser of a commercial property as the cost implications of having to obtain the EPC yourself, should you sell the property within the 10 year shelf life of the report, could be significant.

How have EPCs affected the market?

At this stage EPCs are still a very new concept and their full effect on the marketability and value of a property has not yet become clear. There remains much speculation as to what may occur when properties have significantly better ratings than others; it may result in lower running costs or lower carbon emissions, thereby resulting in tax benefits.

Some possible consequences of EPC’s might be:

1. Banks will adopt a two tier lending strategy whereby more attractive buildings that are deemed to be “cleaner” command more attractive lending terms.
2. Landlords and tenants may attempt to impose obligations on each other by way of “green leases” e.g. landlord may set energy targets within the lease itself.
3. Tenants may use the EPC rating to negotiate lower rents with what may be perceived to be a “dirty building”.

If you wish any further information, please email Katrina Ashbolt or call on 01463 239393.

Disclaimer: The information in this publication is based on our current understanding of the law. It has been produced for information purposes only. Professional advice should always be sought before taking any action.

Macleod & MacCallum cannot take any responsibility for losses incurred through acting or failing to act on the basis of anything contained in this publication.