From 6 April 2008 the Energy Performance of Buildings Regulations 2007 will apply to large commercial properties, introducing a requirement to provide a valid energy performance certificate upon their sale or letting.

The requirement will over the next 6 months be extended to cover all commercial properties.

What is required?

A valid energy performance certificate must be produced by an accredited assessor. It will give the building an energy rating and be accompanied by a recommendation report showing how the building could be made more energy efficient.

When is it required?

From 6 April 2008, the Regulations will apply to non-dwellings with a ‘useful floor area’ in excess of 10,000 metres, unless contracts have already been exchanged. Any prospective buyer/tenant should normally be given a copy of the certificate when they are sent written details of the property or allowed to inspect the property, and in all cases before contracts are exchanged.

Transitional arrangements

Transitional arrangements are in place allowing landlords and sellers to commission certificates only following exchange of contracts where the property was on the market before the commencement of the legislation. We recommend that landlords and sellers take further advice where they believe that these transitional provisions might apply.

What about smaller properties?

From 1 July 2008, the Regulations will apply to all non-dwellings with a useful floor area in excess of 2,500 metres.

From 1 October 2008, they will apply to all non-dwellings.

What about short or low value leases?

All lettings, no matter how short the term and how low the rent, will be covered from 1 October 2008 (subject to the exceptions below).

What about assignments and subleases?

The requirement for a certificate will apply where a lease is being assigned and where a sublease is being granted.

Lease renewals or extensions, and lease surrenders, will not trigger the need for a certificate.

What are the penalties for non-compliance?

Trading Standards Officers can impose penalty charges for non-compliance. The penalty will in most cases be 12.5% of the rateable value of the property, subject to a minimum of £500 and a maximum of £5,000.

Are there any exceptions?

There are some limited exceptions:

• Buildings used as places of worship
• Temporary buildings (with a planned use time of less than 2 years)
• Industrial sites, and workshops with low-energy demand, defined as including buildings whose purpose is to accommodate industrial activities in spaces where the air is not conditioned
• Non-residential agricultural buildings, defined as including buildings that are “heated for a few days each year to enable plants to germinate but are otherwise unheated”
• Stand alone buildings with ‘useful’ floor areas of less than 50 square metres, which are not dwellings
• Buildings to be demolished
• No certificate is required to be produced where construction of the building is yet to be completed.

Air-conditioning systems

The Regulations also created an obligation for those with control of air conditioning systems having an output of more than 12kW to have them inspected by an energy assessor at least once every 5 years. For systems installed from 2008 onwards, the first inspection is to take place within 5 years of installation. For those installed prior to 2008, the first inspection must take place before 4 January 2011, unless the system has an output in excess of 250kW, in which case the inspection should take place before 4 January 2009.

For further information contact: Philip Rowland, Solicitor, Adams & Remers Solicitors