Energy performance certificates – be aware

Are you prepared for the impact of the energy act?

By Brent Forbes, director, Petty Chartered Surveyors.
The 2011 Energy Act indicated that it could be illegal to let a property with an Energy Performance Certificate lower than an E by April 2018 and if you haven’t built that into the future of your properties, we are urging you to start factoring this in now.

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.

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.

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.

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