Energy certificates for commercial buildings
The Energy Performance Regulations was implemented by the Government on 29 March 2007. Landlords will be required to provide an energy performance certificate (EPC)to any prospective buyer or tenant when they construct, sell, lease, modify a commercial building over 500 sq m (5,000 sq ft). An EPC provides information to an occupier about the building’s energy performance through its fabric, construction and services. The certificate will show the rating of the building on a scale from A – G in much the same way as we have come to recognise such colour coded labels when we buy a fridge or a dishwasher. In much the same way as the energy certificate in the Home Information Packs is designed to show a home owner where energy savings and improvements can be made, EPCs will highlight what energy is being used within the building and will help owners and occupiers plan for energy improvement. EPCs will last for 10 years and will not have to be re-issued within that time provided no major changes have been made. There is some discussion as to whether the cost of providing an EPC and complying with it can be charged through the service charge of a building in multiple occupation although we do not see any clear reason why this should not the case. If a building is let on a full repairing and insuring lease then there is some discussion as to whose responsibility it is to provide the EPC. A lease expiry is a transaction that will trigger the need for an EPC. At whose cost? Careful drafting now of new commercial leases could make the tenants responsible for providing the EPC within an FRI building. Indeed, careful drafting now should make current service charge provision include for EPCs and their recommendations to be recoverable through the service charge mechanism. By the 4 January 2009 air conditioning installations will have come into the spotlight as any person who has operational control of an existing air conditioning system with an output of more than 250kw in a commercial building will have to provide a valid report. The report will include advice on how to improve the efficiency of the system along with other energy savings requirements. Strettons are in the process of advising clients in relation to drafting new leases and also in relation to finding consultants who can provide EPCs. Needless to say the Government has yet to decide what form the EPC will need to take, this is despite the fact that it needs to be in place by 6 April 2008. We think a delay in implementation is likely in much the same way as the delay in the implementation of Home Information Packs. For more information contact Simon Tilsiter 020 8509 4430.
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