EPC rules are changing – finally!

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Some while ago I blogged about how the rules for the provision of energy performance certificates on commercial property were planned to be changed – but kept being delayed. Well finally the new rules are coming into force – from the 6th April 2012.

That is obviously good news for me as an energy assessor, but it will I hope also make people on both sides of property transactions far more aware of the effect of the energy efficiency of their properties on business generally.

At a business lunch I attended this week I was discussing ‘green buildings’ with a couple of banking clients. They still have to see this having any effect upon their lending – either from a security point of view or value stand point. What they are very aware of though is the long-term potential that the energy legislation may have on their security – the proposal that all F & G rated properties will become un marketable from 2018 is already on their radar. The ‘official line’ they have been told by the powers above is that the Government are unlikely to miss their proposed changes in legislation.

This highlights one of my pet hates – lazy landlords – get the easy things done to your properties in terms of ‘greening’ them before marketing. Things like low energy lighting, insulation and replacing old inefficient heating systems. It can make a huge difference to you epc rating.

You have been warned!

Is it really that difficult to pass legislation?

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As a profession we have a vested interest in environmental matters, whether or not ‘green buildings’ are capable of attracting higher values is up for debate (see my colleague Tim Garratt’s recent research). But, one thing we can do is ensure purchasers and tenants of commercial property at least have an idea of how energy-efficient their buildings are. Enter the Energy Performance Certificate (EPC), one of our industries most maligned pieces of paper!

How green is your building?

The residential market has been more EPC savvy than the commercial world for a while, the law has required all residential agents details to have the EPC graph displayed (and consequently the public have come accustomed to it). The Government however in their infinite wisdom decided that the commercial property market wasn’t ready for this level of enforcement (despite it being far smaller than the residential market) and consequently the requirements for EPC’s on Commercial property were ‘wishy washy’ at best, and easy to ignore at worst.

The upshot of this was that EPC’s are not generally prepared before marketing (which they should be) and tend to be prepared just as the property is in lawyers hands – once the deal has been agreed. Consequently the property decision has been taken without any view to the energy efficiency of the building – no wonder green buildings currently show no premium value over ‘ordinary’ buildings!

However, finally last year the Government announced their proposals to bring the Commercial Property world in line with the Residential market – through their proposals for the amendments to the Energy Performance of Buildings (Certificates and inspections) (England and Wales) Regulations 2007 – otherwise known as the EPD regulations.

But, (and there is always a ‘but’), the regulations were supposed to come into force in June 2011, but they were delayed until October 2011 – and now we are being told that they will be delayed until April 2012! We were only told this on Friday by the CLG, so most agents are already in the process of preparing for the changes, so why the delay of almost 12 months in total?

No one really knows, according to the CLG the proposals are still the same as they were at the start. What is clear is that the current situation will prevail until Easter 2012 at which point there will probably be a mad rush to comply by agents who no doubt currently feel ‘relieved’ that they don’t have to get their EPC’s quite yet!

I am still hoping that my work load on EPC’s (I am an assessor) will increase over the next 6 months as people get ready for the change (assuming it is not delayed again), but I am not holding my breath!

So thanks CLG for again being a great help on this!

Time to make commercial agents accountable?

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As a qualified energy assessor I have a vested interest in the enforcement of the law in relation to the provision of Energy Performance Certificates (EPC’s) on commercial properties. To be honest they are viewed by the market as a pain and something that has to be provided but only under sufferance!

Currently, only owners bear the responsibility for commercial EPCs, with agents carrying no responsibility, other than to inform owners that one is required (which they do to cover themselves). But owners only tend to provide them as and when a deal is agreed – not really within the law and not helpful in getting EPC’s properly adopted! Or providing me with work!

However, help is at hand! The CLG (Communities and Local Government) are finally proposing that from July 2011 agents will become responsible for both domestic and commercial  EPCs (they are already responsible on residential properties).

Under the terms of this new proposal, agents will finally become responsible for commercial property EPC’s and will be required to meet the regulatory and compliance standards as set out in the current legislation (Energy Performance of Buildings Directive 2002). This means that the certificate should be available at the point of marketing the property. The requirement for an upfront EPC is in anticipation of the recast EPBD which will introduce EPC ratings with adverts in 2013 (if not before).

My institute the RICS (under whom I qualified as an assessor) are apparently in discussions with both the CLG and DECC to “ensure that practical steps are taken to ensure that agents are in a position to provide this information”.

I am not sure what the ‘issue’ is – all agents have to do is comply with the law as it stands at the moment and they will not even notice the change!

EPC anyone?

EPC’s – You chance to comment!

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Communities and Local Government (CLG) have released a consultation document entitled ‘Making better use of Energy Performance Certificates’.

As the name suggests this consultation is concerned with a number of measures to help improve the effectiveness of EPCs and to make better use of energy performance data.

To download a copy of the consultation document, please go directly to the CLG website.

When the CLG has been pushed on widening EPCs/DECs and compliance at various meetings they have made the point they need to consult, so here is your chance to tell them what you think (of the proposals).

The most relevant chapter to the market as a whole is chapter 5 and I recommend all to read this;

Chapter 5: Energy performance certificate ratings in property advertisements

This poses two main questions as follows;

1. Do you agree that advertisements for the sale or rent of domestic and non-domestic property should include details of the EPC rating?

2. Do you agree that the scheme should be made compulsory by implementing the relevant provision in EPBD2 at an early opportunity?

As a qualified energy assessor I will obviously be replying to this consultation. I have commented before on my belief that the legislation for commercial EPC’s should be the same as residential properties – in other words the EPC should be included on all marketing material. The second question relates to this “bringing in line” with the residential market as quickly as possible.

If the Government is to reach its commitment on reducing CO2 emissions then 80% of this saving will have to come from property. There has therefore to be some control and monitoring of energy efficiency, the EPC is this control and is therefore unlikely to go away! So let’s get to grips with it in the property world and use it.

In the long-term it can only help in driving forwards the agenda for sustainable buildings as well, which also has to be high on our agenda as property professionals.

We have to move with the changes to our market, and not react after the event. We should be a driving force in our industry and not a profession of followers!