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Energy Performance Certificates

Don’t let your most valuable asset be affected

We have recently moved into our new Bicester offices and our thoughts turn to how energy efficient our new home will be. Did you know that legislation is changing (as a result of the Energy Act 2011) in relation to Energy Performance Certificates (EPC’s)?
 
From April 2018 it will be illegal for landlords to let – or offer to be let – commercial or residential property that does not meet the minimum energy standard rating. This change could have a huge impact, in effect rendering non-compliant buildings unlettable. The changes to the EPC’s requirements are all part of the government’s scheme for greater energy efficiency.

How does this affect me I hear you ask? 

The changes to the EPC’s are to set a minimum energy efficient standard on an EPC to an ‘E’ rating – at the moment the minimum ratings are ‘F’ and ‘G’. These changes mean that landlords (and also tenant occupiers who wish to assign or sublet) of property which has an ‘F’ or ‘G’ rating will be unable to let (assign or sublet) them from April 2018. 

It may seem like a long way off but these changes will soon be upon us and you cannot afford to be unprepared. So, what should you be doing now? If you own commercial or residential property, start the process of evaluating the energy efficiency of those properties sooner rather than later. Give yourself plenty of time to be ready for the changes coming into effect in April 2018.

What should you do? 

Commission an EPC for the property as early as possible, even if the property is not currently let or up for let. Getting an EPC at this stage will let you assess and evaluate how much investment will be required to go into the property to ensure that it achieves, at the very least, the minimum required energy rating of ‘E’ which will be effective from April 2018. Doing this now will also ensure that the value of the property is maintained beyond the changes coming into effect.

The requirement for the building to be up to a minimum of an ‘E’ rating also has an impact on the tenant of a commercial or residential building. They should bear in mind that if they are in occupation of the property under a lease and the term of that lease extends beyond April 2018, their ability to assign or sublet will be hindered if the property is not up to the required standard. 

How will getting an EPC now, help to preserve the value of the property after April 2018?

If the minimum requirements for an EPC (i.e. an ‘E’ rating) for a commercial or residential property are not met it could have the following impact on what invariably is a landlord’s most valuable asset:

•    adverse effect on the marketability of the building – some buildings would be impossible to let unless they were upgraded to meeting the minimum requirements

•    adverse effect on the capital value of the building as an asset if its marketability is diminished or reduced

If all this is news to you, fear not, there is still time to act and we can help with any queries that you may have on this or any other property related matters. And before you ask, yes, we too are checking our new offices in Bicester meet the upcoming EPC requirements. 

For advice please contact me or our Commercial Property team.