Until relatively recently the requirement for Energy Performance Certificates to be obtained in various situations (including the energy ratings A-G) has been regarded as an unwanted (but necessary) inconvenience but not something to which anyone paid any particular attention. In the domestic sales market, the information contained in them was largely ignored and the prospect and availability of “Green Deals” has, to a large extent, fallen on ‘deaf ears’. In the domestic letting market their importance has increased recently with the legal requirement that a copy of the Certificate must be given to Tenants in order to avoid problems on termination of the tenancy. In the commercial property sector (discounting large industrial concerns) they have often been ignored altogether.
This is all due to change.
From 1st April 2018, any new Lease of any domestic or commercial building must have at least “E” rating on the EPC. From 1st April 2020, in the domestic market, all existing Leases made prior to 1st April 2018 must have at least an “E” rating. From 1st April 2023 in the commercial sector, all existing Leases made prior to 1st April 2018 must have at least an “E” rating. There are certain exclusions, exemptions and qualifications.
Local Authorities will be the enforcement authorities – through Trading Standards – and Notices can be served on Landlords if non-compliance is suspected.
Penalty Notices can be served and financial penalties imposed. The financial penalties can be quite severe, for example if there has only been a breach for less than 3 months, the fine will be £5,000.00 or 10% of the rateable value (up to £50,000.00) for a commercial property, and £2,000.00 for a domestic property. Breaches for longer than 3 months can lead to fines of £10,000.00 or 20% of the rateable value (up to £150,000.00) for a commercial property and £4,000.00 for a domestic property. In addition there is the significant worry that these remedies may well be actively pursued by Local Authorities, as the regime could be viewed as an important source of income to bolster their ever-dwindling resources.
The conclusion is get advice NOW to ensure your building is able to be sold or let and you do not run the risk of heavy fines for non-compliance.