UK: Energy Performance Certificates – FAQs

Last Updated: 9 April 2008
Article by Elizabeth Shepherd

What is an Energy Performance Certificate and who will produce it?

An energy performance certificate (EPC) will show the theoretical energy/carbon rating of a building, or a part of a building capable of separate occupation, on a scale between A (excellent) and G (poor). It will be accompanied by an advisory report.

Only people who have undertaken suitable training and are registered as approved assessors can produce the certificates.

Do all buildings require an EPC?

This note addresses the requirements for commercial building (ie buildings that are not dwellings). For dwellings, or buildings that contain dwellings, different requirements apply. An EPC will only be required when a building is being constructed, sold or rented out, or when certain modifications are made. There are certain exceptions for some types of buildings.

When do these new requirements come into effect?

EPCs are being phased in from 6 April 2008 as follows:

From 6 April 2008 all buildings with a floor area exceeding 10,000 sq m

From 1 July 2008 all buildings with a floor area exceeding 2,500 sq m

From 1 October 2008 all other buildings

However, transitional arrangements will apply to buildings that were already on the market before 6 April, to make it easier for owners and occupiers to obtain EPCs in the period between 6 April and 1 October 2008. When these transitional arrangements end, owners will have to obtain EPC for buildings that are still on the market on 1 October 2008.

At what point do I actually need the EPC?

A valid EPC must be made available by the owner to the prospective buyer or tenant free of charge at the earliest opportunity and no later than:

  • when written information about the building is provided in response to a request for information from a prospective buyer or tenant; or
  • when a viewing is conducted; or
  • in any event before entering into a contract to sell or let.

How much will an EPC cost?

The cost of an EPC will be specific for each client and will depend upon several factors including the location, building size, available information such as floor plans and portfolio size.

How long does it take to produce an EPC?

In theory, if all the information is easily available and the building is not complex, then an EPC could be produced within a week. However, this may not always be possible, so it may well pay to have the EPC on file well before the transaction starts.

It is thought that initially demand for EPCs will far outstrip the available resources leading to delays in production. As demand slows and the number of qualified assessors rises, then the lead time should fall.

What is in the Advisory Report?

The Advisory Report is aimed at improving the theoretical energy rating of the building and will contain appropriate recommendations.

Can landlords recover the cost of an EPC through the service charge in a lease?

There is no simple answer to this. It will depend upon the terms of the lease and the purpose for which the EPC is being obtained.

When all or part of a building is refurbished, is a new EPC needed immediately?

A new EPC will be needed if a building is modified so as to have fewer or more parts designed or altered for separate use, and the modification includes the provision or extension of any fixed services for heating, hot water, air conditioning or mechanical ventilation.

When a building is to be sub-let, who is responsible for producing the EPC?

The organisation or person granting the sub-lease is responsible for production of the EPC (but can use an existing EPC if one has already been created). The ultimate landlord has a duty to co-operate with such organisation or person.

What should I do as the next step?

Property owners should assess how many EPCs are likely to be required and when.

They should also review the available information for each property, as this will affect the costs and time required by an assessor to produce the EPCs.

Some owners are taking the view that a building might be sold at short notice and are therefore intending to obtain EPCs for all their properties subject to the availability of assessors.

Others are spreading the cost by prioritising the building stock depending on end of lease' dates, floor areas or voids.

The next step is then to obtain a cost estimate from one or more energy assessors.

What are the consequences of not having an EPC?

The penalty for failing to make an EPC available is fixed, in most cases at 12.5% of the rateable value of the building with a default penalty of £750 if the formula cannot be applied. The range of penalties under this formula is set with a minimum of £500 and capped at a maximum of £5,000.

What happens if an EPC cannot be obtained in time?

The relevant person will not be liable for a penalty charge if he or she has made a request for an EPC at least 14 days before it is required. However, an EPC still need to be made available as soon as the duty holder has it.

Who will police the new regime?

It is the responsibility of local authorities, through their Trading Standards Officers, to ensure that EPCs are in place and they will be the body that brings any proceedings for breach.

Am I obliged to undertake any improvements listed in the advisory report?

Not as yet. However, further legislation is currently being considered by DEFRA and you may find that if your organisation is covered by the Carbon Reduction Committee (CRC) which is due to come into force in 2010 your organisation will need to make energy efficiency improvements to your building to reduce the number of carbon credits that it would need to trade under this scheme.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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