Background
The Climate Change Act 2009 has introduced the Regulations with the aim of improving the energy efficiency of commercial properties and helping the country meet internationally agreed energy targets. The Regulations will require some property owners to report on the energy efficiency of their buildings and to act on the findings. As a result, local authorities will have authority to impose a £1000 penalty for non-compliance (for each failure).
Who will the Regulations apply to?
Initially, qualifying buildings will only be larger commercial buildings (or units within a building) with a floor area of 1,000 m2 or more, that are already required to provide an Energy Performance Certificate (‘EPC’).
What action must be taken by owners of a qualifying building?
If your building qualifies, the point at which the obligation is triggered comes at sale or lease of the building. After obtaining an EPC, in line with current requirements, step one is to perform an assessment with the aim of identifying improvements in energy efficiency (examples may include boiler replacement, inclusion of insulation etc.). Step two is to translate those identified improvements into an Action Plan which will indicate measures to be taken to realise the improvements. This Action Plan will have to be exhibited to prospective tenants or buyers (who will be deemed as such, for this purpose, as soon as they request information on the building with a view to deciding on whether or not to rent or buy).
Do the actions have to implemented immediately?
An owner may choose to defer the physical improvement timetable if they monitor and report the building’s operational energy ratings annually. If, however, an owner opts to implement the improvements, they have 42 months in which to do so.
Which buildings or scenarios are not exempt or excluded?
Action to assess and improve or report on the efficiency of a building will not apply to:
- Buildings that meet the energy standards equivalent to those introduced by the 2002 Building Regulations.
- Buildings which do not require an EPC.
- Buildings that have already undergone improvements via Green Deal.
- Temporary buildings with a planned time of use of 2 years or less.
- Buildings and building units on which construction has not been completed.
- Workshops and non-residential agricultural buildings with low energy demands.
- The sale or lease of a building at any time before the construction of the building has been completed.
- The renewal of an existing lease with the same tenant.
- The grant of a "short term lease" (not more than 16 weeks with no option to extend) where the building has not been let by the owner during the preceding 36 weeks.
If you would like more information about the Regulations or their impact on your business, please contact us.
