Energy performance certificates – be aware
Are you prepared for the impact of the energy act?
This accounts for about 1 in 5 UK commercial properties so, unless improved, around 20% will become ‘un-tenantable’. With an estimated 16% of England and Wales’ 1.3mn non domestic stock rated F and G, EPC specialists put the cost at refurbishing these buildings at around £30bn.What is not clear is how much has already been done. Many Landlords are addressing this issue and have been improving the sustainability of their commercial buildings since 2007 but how much progress has been made is not certain.
For those Landlords that haven’t reviewed their buildings, there is still time to act before too much time passes and larger, unexpected bills are received. The market has begun to do its job and prospective purchasers are already using sub-standard EPC’s to chip away at prices, but the market can’t do it all.2018 is the latest that this can take effect but it is expected to come into force much sooner. In all buildings, thought must be given to assessing the costs of improving efficiency and what affect this will have upon the property’s value.
The best approach may be to get rid of the property while you can. At present, only leases are affected not sales and it is still unclear whether these rules apply to long leases. Assignments do not appear to be covered so a tenant may be able to assign a lease but not sub-let it after 1 April 2018. There is still some uncertainty but it is clear that if you are affected by what is known now; steps need to be taken.