Energy Performance Certificates For Commercial Properties

The rules and regulations on Energy Performance Certificates (EPCs) are frequently changing, but it is important to be aware of your responsibilities.

An EPC is a certificate containing information relating to the energy efficiency of a building and can be useful for buyers/tenants in deciding on whether or not to take on a property.

When is an EPC required?

When you are selling or renting out a property (but not where it is merely a lease renewal)
When a newly built property is completed
Where there is any change to the number of parts of a building used for separate occupation involving changes to heating, air conditioning or mechanical ventilation systems.

An EPC must be commissioned before a property is marketed for sale or rent. Generally, if there have been no changes to a building then an EPC is valid for 10 years.

Requirement to Display

Where a commercial building is frequently visited by the public and has a floor area of more than 500 square metres then it is a requirement that the EPC must be displayed in a prominent place, clearly visible to members of the public who visit the building. There is a penalty of £500 for failing to display the EPC.

Exemptions

An EPC is not required if it can be shown that the building falls into one of these categories:

Listed or officially protected and the minimum energy performance requirements would unacceptably alter it
A temporary building only going to be used for not more than 2 years
Used as a place of worship or for other religious activities
An industrial site, workshop or non residential agricultural building which doesn’t use much energy
A detached building with a total floor area of not more than 50 square meters

Penalties

The penalty for failing to make a commercial EPC available to a prospective buyer or tenant is in most cases fixed at 12.5% of the rateable value of the building, with a default penalty of £750.00 where the formula can’t be applied, and a minimum of £500 and maximum of £5,000.00.

Current requirements

Landlords of commercial properties may not grant a tenancy to new or existing tenants if their property has an EPC rating of band F or G (subject to exemptions).

Upcoming Changes

In April 2023 this restriction will apply to leases already in existence, no matter when they were granted.

Proposed Changes for commercial properties – likely to be confirmed in 2025

1 Apr 2027: Interim requirement of a C EPC rating

1 Apr 2030: Requirement for a B EPC rating

It is estimated that only 12% of commercial premises have an EPC rating of B or above so there will need to be some significant upgrades to existing buildings