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Press Release - June 09
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Massive Non Compliance with Energy Regulations Revealed
Even the greenest of businesses are unlikely to be able to make informed choices about the energy efficiency of the premises they buy or rent right now, according to new research published by National Energy Services (NES).

In a mystery shopping exercise to check on compliance with European and UK law relating to the energy performance of buildings in the commercial property sector, NES discovered that more than 80% of agents it spoke to were unable to provide the mandatory EPC for the offices or shops they were marketing for sale or rent.

The Energy Performance of Buildings Directive specifically states that a valid EPC and recommendation report must be made available free of charge by the seller or landlord to a prospective buyer or tenant when non-dwellings are sold or let. This must be at the earliest opportunity and no later than when any written information about the building is provided in response to a request for information received from the prospective buyer or tenant, when a viewing is conducted and in any event, before entering into a contract to sell or let.

Our experiences indicate that the EPC is not being instructed by the appropriate person until immediately before completion of the transaction or in some cases post-completion.

These certificates are a critical part of the Government's efforts to reduce carbon emissions and energy bills for businesses. 88 out of 108 agents (81%) failed to provide an EPC. Almost half of these agents (47%, or 41 agents) said they believed the certificate was not necessary, or just could not give an explanation about why no EPC was available.

Local authorities (usually their Trading Standards Officers) are responsible for enforcing the requirement to have an EPC on sale or let of a building. Failure to make an EPC available when required by the Regulations could result in a civil penalty charge notice.

The penalty for failing to make an EPC available to any prospective buyer or tenant when selling or letting a commercial building is fixed at 12.5% of the rateable value of the building, with a default penalty of £750 where the formula cannot be applied. The range of penalties under this formula are set with a minimum of £500 and capped at a maximum of £5,000.

Following their research, NES have made the following recommendations which they would like to see put into practice in the commercial property market:-

1. Make the display of the EPC rating mandatory on all commercial building particulars used by agents to market the building. This will increase transparency and will make enforcement of the regulations easier. It will also increase awareness amongst potential buyers and tenants on the energy efficiency of the building they are looking at. This requirement is currently in place for the marketed sale of dwellings. This measure could be achieved for commercial buildings quickly and at little or no cost.

2. Place the legal responsibility of providing an EPC on the actual entity marketing the commercial building (e.g. the commercial property agent). Currently, it is the responsibility of the seller or landlord offering the building for sale or let to make an EPC available for their building. This is unlike the dwellings sector, where the legal liability rests with the entity actually offering the dwelling for sale. It is generally believed that the dwellings sector has a high level of compliance and it is perhaps because estate agents have a direct legal responsibility to ensure they are compliant with the EPC requirements. In the commercial sector, if legal responsibility for the EPC was changed to reside with the entity marketing the building, it could allow agents to make a positive contribution to both the levels of compliance and to promoting investment in improving the energy efficiency of the buildings they market.

3. Make the implications of non-compliance more acute by increasing the penalties. The current levels of penalties range between £500 and £5,000 depending upon a building’s rateable value. Clearly this is not providing a deterrent to non compliance and therefore there is an argument that the penalties and enforcement are inadequate.

4. CLG should work alongside the property and energy industry to reinvigorate and clarify their communication programme particularly in the segment of smaller commercial buildings and with Trading Standards Departments. CLG should urgently establish a small industry working group to help them in this task. This should include the energy assessor community whose enthusiasm to ensure that EPCs are successful could be harnessed to communicate clear information at a local level.

Austin Baggett, deputy managing director of NES, said: “The EPC is not just any piece of paper. It's now required by law to inform potential buyers or tenants about the energy performance of a building, so that they can consider energy efficiency as part of their investment or business decision to buy or occupy that building.”

“EPCs are a great vehicle to deliver the UK's carbon reduction plans. All the infrastructure is in place, including thousands of qualified energy assessors ready to provide these certificates at short notice. But with 80% of commercial buildings not complying with the regulations, the potential for carbon and financial savings by business is seriously undermined.”

Wilbourn Associates fully support these proposals as it is vital that EPCs are undertaken as early as possible in the marketing process in order to provide prospective buyers and tenants with the most information possible in order for them to make informed decisions regarding the premises they buy or rent.


For further information about this press release please contact Kerry Stead or Phil Gelsthorpe at Wilbourn Associates on 0114 243 5500 / 07973 797011.



   
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