Important Changes to Commercial EPC Regulations

The Kyoto Agreement was a long time ago – 1997, to be precise – but reverberations from its ground-breaking commitment to radically reduce global carbon emissions are still being felt in the day-to-day operation of Scotland’s commercial property market.

It was out of Kyoto that the European Parliament directed 29 countries, including the UK, to legislate on the energy efficiency of buildings, both residential and commercial, leading to the introduction of Energy Performance Certificates for property.

And a new aftershock is about to hit the market with changes to Scottish legislation from January 9 next year which means that where an EPC is required on the sale or rental of a property, the energy performance indicator from that EPC must be clearly stated in any advertisement in related commercial media.

Now, this might seem a fairly obvious thing to do. After all, EPCs have become a reluctant fixture in the marketplace – what commercial property buyer would opt for fuel inefficiency over efficiency, everything else being equal Energy costs are increasing, and this is an issue which property occupiers will surely seek to address over time.

Unfortunately, despite having been part of the marketing process since 2009, EPCs and the recommendations for improvement that come with them have been treated since inception as something of an afterthought by both buyers and sellers – a detail to be tidied up along with the missives.

This is what the amendments to the legislation are designed to end. Now, in the same way that a home cannot be marketed without a Home Report, no commercial property can be marketed without the energy performance indicator being clearly stated on particulars and adverts.

The responsibility for inclusion lies squarely with the property owner – and it is quite a responsibility, with fines of up to £1000 for any breach of the new regulations with existing penalties still in place where there is a failure to obtain an EPC at all. Furthermore, this legislative change is also retrospective, meaning that it will apply to all properties on the market, not just those coming on after January 9.

The changes also have considerable implications for commercial agents, who have a professional duty to make clients aware of all their obligations under the law and the penalties for not complying.

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