Why you need an EPC (Energy Certificate)
It is crucial to know why you need an EPC (Energy Performance Certificate). Pursuant to the Energy Performance of Buildings Directive (Directive 2002/91/EC—the EPBD), it became law in the UK in January 2009 that those with buildings offered for sale or rental were required to provide an EPC. This requirement occurs “as soon as a building is in the process” of sale or rental, which includes verbal enquiries for building particulars and requests for viewing.
The specific time that the requirement is triggered means that an EPC must be made available to any prospective buyer or tenant at the earliest opportunity – before entering into a contract, when written information about the building is given to someone who requests it and when the building is viewed by a prospective buyer or tenant.
The EPC and the accompanying Recommendation Report must be provided free of charge to prospective buyers or tenants.
When a building is marketed, the EPC rating must be included within all marketing literature (including sales particulars and all advertising). If the EPC is not included within such marketing, estate agents are automatically reported to the Office of Fair Trading (OFT) which could lead to a banning order.
However, it is chiefly the building owner’s responsibility as landlord or seller to provide an EPC and not doing so could lead to the Local Authority Building Control department seeking enforcement action against you as well as risking a fine of between £500 and £5,000. For landlords, this is particularly important as, since April 2018, no property with a minimum energy performance rating below E is allowed to be let.
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Penalties and Fixed Notices
In relation to domestic EPCs, there are fixed penalties for failing to provide an EPC or make one available when required – £200 per dwelling. There is a six month time limit for any enforcement action to be taken. Again, landlords of domestic dwellings should bear in mind that as from October 2015, if an EPC was not provided with a new tenancy, they will not be able to seek possession using a section 21 notice until a valid EPC has been served.
Notwithstanding the legal obligations and potential penalties involved in not providing an EPC, there is also good evidence to suggest that ‘greener’ properties offer considerable benefits to occupiers and owners, which will be reflected in property values. At EPC For You this is why the accuracy of assessment is so important so as to provide reassurance that the EPC can be relied upon when the future value of the property is calculated.
It is also becoming more and more popular for major tenants (particularly commercial ones) to consider their ‘green’ credentials as part of their corporate responsibility.
The intention of the EPBD included certification and labelling of buildings to enable corporate bodies and individuals to take account of ‘green’ considerations as part of the transaction value.
With this in mind, not only are penalties avoided when obtaining an EPC but there are clear benefits too, which include attracting a tenant quicker , and having your building ready to let or sell faster – the right kind of tenant is also more likely to be attracted to landlords who take the EPC seriously, such a tenant being one that is looking to remain on a more long-term basis, in this sense, expenditure in tenant turnover is reduced. Financially, research also suggests that an EPC can bring higher rents and higher capital values, which again, will prove useful to a landlord come rent review. For those wishing to sell their property, it has been reported that higher sale prices, of up to 27%, are being achieved.
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