Energy Performance Certificates

1
Energy Performance Certificates

• Chris Rodgers FRICS
• CR Energy Ltd.
• March 2009

2
Energy Performance Certificates

• Domestic EPCs
• Rental Dwellings
• Commercial Buildings
• On Construction EPCs
• Display Energy Certificates

3
Who are we?

• One of the countrys largest EPC providers
• 700-1000 houses lodged per week
• Up to 100 commercial buildings per week
• - at Level 3 and 4
• - occasional Level 5
• Call centre in Skelmersdale
• Home based, fully employed staff Nationwide
• Professional Indemnity Insurance to 5,000,000

4
Where has all this Legislation come from?

• Brussels, it is a European Directive - European
  Performance of Buildings Directive
• Part of the Kyoto Treaty
• Its not going away its here to stay
• Europe committed to have EPCs on virtually every
  building in the Union
• All of you will be affected by this legislation,
  on your homes, on your rental properties and in
  the commercial buildings that you work

5
What is an Energy Performance Certificate?

• Fridge style ratings for buildings
• - A most efficient
• - G least efficient
• Contains Recommendation Report, with
• suggested efficiency improvements
• - Cost-effective alterations to the
• building
• - Measures that require a higher level
• of expenditure, such as installation of
• renewable energy systems

6
(No Transcript)
7
Domestic Energy Performance Certificates

• Part of a Hip (Home Information Pack)
• Cost 65 - 150
• Triggered on marketing
• From 1st April 2009, no home can be marketed for
  sale or let without an EPC in place
• Lasts for 3 years

8
EPCs on Rental Dwellings

• EPC required on sale or let (before marketing)
• Affects
• - Private landlords
• - Local Authorities
• - Registered social landlords (Housing
  Associations)
• - Housing groups
• Lasts 10 years
• Most Local Authorities and RSLs have void
  programmes in place, 7-10 of stock per annum
• Cost 50 - 70 per dwelling
• Many Framework Agreements already in place

9
Commercial EPCs

• The landlord or seller must provide an EPC at
  the earliest opportunity and in any event on the
  first to occur of
• provision of written information about the
  building to a person who has requested
  information
• A prospective buyer or tenant viewing the
  building
• A contract being entered into to sell or rent out
  the building
• In other words, as soon as any form of enquiry is
  made or sales particulars produced
• Not required on lease renewals

10
How to deal with Dreamers and Messers

• No obligation to provide an EPC if the seller or
  prospective landlord has reason to believe that
  the prospective buyer or tenant is
• Unlikely to have sufficient means to buy or rent
  the building
• Not genuinely interested in buying or renting a
  building
• Not a person to whom the seller or landlord is
  likely to be prepared to sell or rent out the
  building

11
A Building needs to be Defined

• What is a Building
• - a roofed construction with walls
• - only where energy is used to condition the
  indoor space
• No heating or cooling no EPC
• (provided it has not been designed to be heated)

12
Are there Exempt Buildings?

• YES
• Buildings which are used primarily or solely as
  places of worship
• Temporary buildings with a planned time of use of
  two years or less
• Industrial sites, workshops and non-residential
  agricultural buildings with low energy demand
• Stand-alone buildings with a total useful floor
  area of less than 50m² which are not dwellings

13
Demolition Exemption

• EPCs are not required when the property being
  sold is due for demolition
• The CLG have defined this as
• The seller must be able to demonstrate that
• - The building is to be sold with vacant
  possession
• - The building is suitable for demolition, and
• - The resulting site is suitable for
  redevelopment

14
Sales/Lets of Parts of a Building

• The EPC should reflect the space being
  sold/rented
• - Common heating system EPC of part is based on
  the energy usage of the whole (then proportioned
  into the space being sold/let)
• - Often leads to the whole building being
  considered
• - Landlord and Tenant are not able to share the
  cost
• The EPC should also include any use made of
  common parts
• - Only relevant if energy is used to condition
  the indoor space of the common parts
• - Common part use apportioned based on floor
  area

15
Building Alterations and Modifications

• EPC is required if
• - The resulting building now has a different
  number of units (greater or fewer)
• - The modification includes the provision or
  extension of any of the fixed services for
  heating, hot water, air conditioning or
  mechanical ventilation.
• Both of the above items need to happen to trigger
  an EPC
• Building owners should note that it is the
  contractors responsibility to produce an EPC, it
  will be necessary as part of Building
  Regulations
• Building Control will not sign off the building
  work without an EPC

16
Multi-let Properties - How many EPCs?

• Common heating system
• - Only one EPC required for the whole building
• - Mixed use property
• Dwellings always need their own EPC
• Commercial parts need a separate EPC
• Separate heating systems
• - Each part requires its own certificate
• Where the unit is part of a block, the
  certificate can sometimes be based on the
  assessment of another representative apartment or
  unit in the same block

17
Types of Commercial EPC

• Prepared by an accredited assessor
• Accreditation is different for certain types of
  buildings
• - Level 3 simple commercial buildings SBEM
  software
• - Level 4 More complex buildings that do not
  fall within Level 3 SBEM software
• - Level 5 new and existing complex buildings
  (mainly done by mechanical engineers and will
  apply to very few buildings) Dynamic simulation
  modelling software

18
Commercial EPCs - Cost

• To be provided free of charge to the buyer or
  tenant
• - Cost 375 plus VAT up to 10,000 plus VAT for
  most complex buildings
• Landlord unlikely to be able to recover through
  the service charge
• - Could not charge to incoming tenant
• - Modification EPCs will be hidden in the
  builders quote

19
On Construction EPC

• Specialist qualification
• Controlled by Building Regulations Building
  Control Officers
• No EPC no Building Regulations Approval
• Methodology
• - Design the building
• - Produce a SAP report
• - if putting up for sale produce Predicted EPC
  (a PEC)
• - Complete the building
• - Produce and lodge final EPC
• Developers beware this could hold up approvals
  therefore sales
• Lasts 10 years
• Cost 90 - 105 per dwelling, more if a PEA is
  required

20
Display Energy Certificates

• All public (institutional) buildings in England
  and Wales
• - Universities every building
• - Schools
• - Prisons, separate DECs per block
• - Town Halls
• - Swimming baths etc
• Over 1000m2 area transitional arrangements are
  also in place to 2009
• Annual renewal
• Based on size and power consumption Operational
  Rating
• Three years certificates to be displayed
• Cost 500 - 1,100 depending on complexity and
  size
• In Scotland all public buildings will need an EPC
  from January

21
Regulation

• Building Control regulate EPCs for new buildings
• Trading Standards regulate for existing buildings
• Fines for non-compliance
• - 12.5 of the rateable value minimum 750
• - Capped at 5,000 (but how often?) not
  defined
• - Fine may be issued on multiple occasions if
  EPC remains
• outstanding

22
Emergency Situations

• EPC has been requested 14 days before required
  but is not yet available
• Emergency Lettings
• - Tenant requires urgent relocation
• - Landlord does not have the EPC and there is
  insufficient time to obtain one
• In both cases seller or landlord must provide the
  EPC at the earliest opportunity
• No fine provided the above can be demonstrated

23
Finally Where is this Leading?

• Possibilities
• - Higher rates for poorly performing properties
• - Government subsidies for housing stock
  improvements, insulation, double glazing etc
• - New forms of Property Tax
• - Long term improvements on commercial building
  stock, higher graded buildings will get higher
  rents
• - New building design will consider best
  practice to achieve higher gradings
• - Major tenants with serious CSR will only
  occupy higher graded buildings pressure on
  landlords

24
Why use CR Energy?

• Fully employed whole of UK workforce
• Financially very stable VC backed
• On line advice centre www.crenergy.co.uk
• A knowledgeable team in an emerging piece of
  legislation
• Lastly were nice to deal with!

25
For further information contact the Quotation
TeamOffice 0870 386 6100Fax [phone]
6101E-mail enquiries_at_crenergy.co.uk