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EPC rules – the hot potato

EPC rules – the hot potato The new regulations regarding EPCs are here – so what are the key changes and why have they been introduced – and what new details are emerging? Says Stephen O’Hara, Chairman of PEPA.

The Negotiator
EPC image

Debate still rages on about the EPC being included in every document that constitutes ‘written particulars’.

From the 6th April new regulations regarding the commissioning and displaying of Energy Performance Certificates (EPCs) have come into force. The changes aim to help improve the energy efficiency of the UK’s buildings by providing consumers with more upfront and useful information about the energy efficiency of any property they are planning to buy or rent.

Stephen O'Hara image

Stephen O’Hara

Under these new regulations, agents are required to take on further responsibilities with regards to the securing and presenting of EPCs for both residential and commercial buildings available for sale or rent.

Following further clarification from Government surrounding the changes, Stephen O’Hara , Chairman of PEPA, the Property Energy Professionals Association draws out some of the key changes as detailed in the Government’s latest note on the Energy Performance of Buildings Regulations and looks to address some of your frequently asked questions.

THE KEY CHANGES

1. Clarification of when an EPC is required – Regulation 5
It is now a legal requirement that the Energy Performance Certificate (EPC) is provided at the very earliest opportunity. The EPC must be delivered no later than whichever of the following actions takes place first:

  • When the relevant person (e.g. the agent) provides information in writing about the building to a person who has requested it
  • When a pre-arranged viewing of the building takes place The change is intended to counter a common misconception that the EPC can legitimately be delayed until shortly before both parties enter into a contract for sale or rent.

2. The requirement to commission an EPC before marketing – Regulation 5A
The requirements around EPCs for residential properties marketed for sale have now been extended to include residential properties marketed for rent and for all commercial buildings available for sale or rent.

The revised regulations now state that the person acting on behalf of the seller or landlord (e.g. the estate agent or letting agent) must be satisfied that an EPC has been commissioned before they start marketing on their behalf. It also states that where marketing starts without an EPC, the seller or landlord and the person acting on their behalf must make all reasonable efforts to ensure that the EPC is obtained within seven days from the start of marketing.

Following the expiry of this seven day period, the revised regulation stipulates that a maximum extension of a further 21 days will be given, provided sufficient evidence exists to demonstrate that all reasonable efforts have been made to procure the EPC. If the property remains on the market beyond a total of 28 days, Trading Standards Officers may serve a penalty notice, even if there is a legitimate reason for delay.

These changes are designed to ensure that prospective buyers and tenants see the EPC much earlier on the process, allowing them to make a more informed decision.

3. New requirements and clarification surrounding written particulars – Regulation 6
Previously, Regulation 6 required that all agents (or the relevant person marketing a residential property for sale) must include energy information on all the written particulars that have been prepared for potential buyers of a residential property. This has also now been amended to extend to residential properties for rent and for commercial buildings.

A further amendment has been made to remove the option to just include the asset rating in written particulars – a copy of the first page of the EPC must now be attached in all cases.

The revised regulations have also provided two definitions for written particulars – one for buildings to be sold and another for buildings to be rented.

For buildings being sold, the duties apply to a written description of the property, which includes at least two of the following:

  • A photograph of the building or any room in the building
  • A floor plan of the building
  • The size of the rooms in the building, or
  • The measured area of the building For buildings being rented, the duties apply to a written description of the property, which includes at least two of the following:
  • A photograph of the building or any room in the building
  • A floor plan of the building
  • The size of the rooms in the building The measured area or the building, or
  • The proposed rent

By requiring that the entire front page of the (new style) EPC is attached to all written particulars, potential buyers and tenants will be presented with much more upfront information – including advice on what steps could be taken to improve the building’s energy efficiency.

Reproduction of the EPC and electronic particulars

Following consultation with the industry, the Government has confirmed that the EPC can be reproduced in a smaller size (provided it is still legible and meets other legal obligations) and that a black and white copy of the EPC is acceptable.

The changes are to ensure buyers and tenants see the EPC much earlier in the process.’

The Government has also made it clear that the regulations also apply to written particulars in an electronic format. The EPC Register Operator has provided a technical solution, which will enable property agents to retrieve the EPC from the Register and to attach it to electronic particulars. More information is available upon request from: epc.enquiry@communities.gsi.gov.uk

The removal of addresses from the EPC

The Government has confirmed that the address of the property cannot be removed from a domestic EPC. However for commercial buildings (e.g. in the instance of a confidentiality issue surrounding a commercial property transaction), the removal of the address will be allowed. The EPC Register Operator has provided a technical solution that will allow agents to attach the EPC to on-line written particulars, with the address removed.

4. Increased power to the enforcer of the regulations – Regulation 39 and 40
Under regulation 39, enforcement authorities (ie Trading Standards Officers) have now been given enhanced powers enabling them to request evidence from an agent that an EPC has been commissioned. Such evidence could take the form of a written communication from the seller or landlord that the EPC has been commissioned or a copy of the commission itself.

In line with this, Regulation 40 has been amended to allow enforcement authorities to issue a penalty charge notice if sufficient evidence is not provided.

All of the above changes in regulation have come into effect from the 6th April 2012 and apply to all properties put on the market for sale or rent, on or after this date.

Some final words from the PEPA Chairman

Agents are clearly being faced with a number of changes, which they will need to implement to ensure they are not in breach of the new regulations and as a result, at serious risk of incurring penalty fines. However, with the new regulations now in place, we must embrace them and work together to deliver the best possible product and service for the customer. It is important to remember that the new regulations could significantly reduce the carbon emissions released by the UK’s buildings, while offering significant benefits for the consumer.

For any agents that are still unsure of what is required, I would strongly advise them to speak to their Domestic Energy Assessor (DEA). A good DEA will be well informed of the new regulations and will be able to offer agents advice and guidance on what needs to be done to ensure compliance. If agents are still unsure of what is required, PEPA has set up a dedicated email resource. Agents can email any queries direct to: info@pepassociation. org where a PEPA representative will endeavour to respond to any enquiry within 48 hours.

Guidance in this article is directly based on the Department of Communities and Local Government’s note on the changes regarding the Energy Performance of Buildings Regulations – as issued on the 23rd March 2012.

The Property & Energy Professionals Association (PEPA) is a trade body which represents business that is engaged in the provision of Energy Performance Certificates (EPCs) and Display Energy Certificates (DECs). Members of the Association include companies that undertake and distribute EPCs and DECs, the accreditation schemes that oversee the products, the energy assessors that produce them and the technology companies that support the industry.

www.pepassociation.org

May 14, 2012

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