MacRoberts Real Estate e-update 06/10/08

ENERGY PERFORMANCE WILL BE A HOT TOPIC IN 2009

The requirement for Energy Performance Certificates (EPCs) for residential and
commercial buildings has been on the horizon for some time now, having been
introduced in Scotland via the Technical Handbooks applicable under the Building
(Scotland) Act 2003 and the Building (Scotland) Regulations 2004.

The Scottish Government has now produced draft Regulations in relation to EPCs,
which will become effective from 4 January 2009. (EPCs will be required for
dwellings from 1 December 2008, but apparently will not be subject to the
Regulations until 4 January 2009).

Which buildings require an EPC?

New build
The requirement for an EPC has applied to new commercial buildings constructed
since 1 May 2007 which:

• have an area in excess of 50 square metres; and
• that use fuel or power to control the temperature of the internal environment, e.g. air
  conditioning.

The requirement applies to buildings into which temperature control services are
designed and built, and not to those in which cooling equipment (such as fans or
mobile air conditioning units) are used. This is a requirement of the current Building
Regulations, not of the draft EPC Regulations; the provisions of the EPC
Regulations, summarised below, will not apply to new buildings until 4 January 2009.

Existing buildings
The Building Regulations and Technical Handbook will, from 4 January 2009, require
EPCs to be obtained for all existing commercial buildings which meet the above
criteria and which are being sold or leased, and for all public buildings over 1000
square metres, although no direction has yet been issued.

Obligation to produce an EPC on sale or let
The most notable obligation under the draft EPC Regulations is the one which will
require the owner of property to obtain an EPC and to make a copy of it available to a
prospective purchaser or tenant, free of charge. A party becomes a prospective
purchaser/tenant when they (a) ask for information on the property, (b) ask to view
the property with a view to purchase/let, or (c) make an offer (even an oral offer) to
purchase/let. The obligation to produce an EPC, therefore, arises at the marketing
stage, and applies even to those who do not proceed to buy or lease.

Consequences of failure
Failure to provide an EPC to a prospective purchaser will be a breach of the
Regulations and may incur a fine. Local authorities will have the power to require
production of EPCs. Failure to produce an EPC at the relevant time to a prospective
purchaser/tenant, or to the enforcement officer as the case may be, may result in a
penalty notice being issued. The penalty will be £500 in respect of dwellings, and
£1000 in respect of all other buildings.

Conclusion
EPCs are going to become a key feature of property life in early 2009. The penalty
provisions notwithstanding, the single greatest motivator for obtaining EPCs is likely
to be the effect on marketability and price of not obtaining an EPC. Property owners
would therefore be wise to apply energy to ensuring their performance under the
Building Regulations and EPC Regulations.

If you require any further assistance or information please contact Anne
Fergusson on 0131 229 5046

© MacRoberts LLP 2008