By 1 October 2008 all buildings whether residential or commercial that are constructed, sold or rented out will require an "Energy Performance Certificate" (EPC), as part of the Government's drive to improve the energy efficiency of buildings.

What is an EPC?

New 2007 Regulations specify that EPCs should provide details relating to the energy performance of a building, which will include an "asset rating". This sets out data on the energy that is required to meet the needs and uses of a particular building. EPCs will be based upon overall energy use, including space heating and cooling, ventilation systems, hot water, lighting and CO₂ emissions and must be commissioned from "energy assessors" who are accredited to produce certificates for certain categories of building.

EPCs will be valid for ten years and an original or copy should be made available free of charge by the "relevant person" (i.e. in the case of a sale - the seller, or in the case of rentals - the prospective landlord) to any prospective purchaser or tenant at the earliest opportunity and, in any event, before entering into a contract to sell or rent out the building. In the case of construction, either erection of a new building or modification of an existing structure, it will be the contractor who must provide an EPC to the owner whilst, at the same time, notifying the local authority to this effect. Provision of an EPC in such cases is tied in with the requirements of the Building Regulations 2000 but, in any event, must be no later than five days after works have been completed.

Exceptions to the rule

An EPC will not be required for:

(i)	"off-plan" sales or lettings prior to the final construction of a building;
(ii)	certain classes of buildings, for example, places of worship, temporary buildings planned for two years or less, or buildings to be demolished.

How will this affect you?

Sellers and landlords will bear responsibility for producing EPCs together with any associated costs. Prospective investors and tenants will be afforded the opportunity of making objective comparisons between buildings based upon energy performance ratings, possibly even using the information as a bargaining tool!

Failure to comply with the new requirements

In terms of enforcing the new regime, local authority officers may impose penalty charges ranging from £200 to £5,000 depending upon the type of building and the breach in question.

Commentary would suggest that the new measures will affect investment values. That having been said, we have no evidence to suggest that this will be the case ... only time will tell. It is clear, however, that energy efficiency is moving up the political agenda. Ignore it at your peril!

When will EPCs be required? Dates for your diary: