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Energy Performance Certificates and the Energy Act 2011

Energy Performance Certificates (EPCs) are back in the spotlight with the provisions of the Energy Act 2011.

An EPC is required when a property is marketed for sale or to let. The EPC is intended to inform potential purchasers or tenants of the energy efficiency of the premises (graded on a scale of A-G) with accompanying recommendations as to how energy efficiency could be improved. EPCs are relatively inexpensive to produce and the energy efficiency rating for a property could, until recently, be viewed as being of limited significance to value. This looks set to change.

The Energy Act includes provisions for the introduction of the Green Deal, and it is due to these provisions that we expect to see an increase in the significance of the EPC rating for a property.

  • Green Deal establishes a framework to enable private firms to offer consumers energy efficiency improvements to their homes, community spaces and businesses at no upfront cost, and to recoup payments through a charge in instalments on the energy bill.
  • Regulations, to be published at an as yet unspecified date, not later than April 2018, will prohibit landlords of both residential and commercial properties from letting properties deemed to be below the minimum standards of energy efficiency.
  • Energy efficiency will be determined by reference to the EPC for the property with the required standard for letting likely to be an EPC grade of E or above.
  • The owners of properties with an EPC of below grade E will need to illustrate that the maximum package of Green Deal funded measures have been undertaken at the property in order to be exempt from the prohibition on letting.

The EPC rating for a property will now be of key significance. Owners of properties that fall below the prescribed threshold will, in the not too distant future, find themselves unable to let the premises unless they have first undertaken the relevant Green Deal works and this may in turn have a negative impact on value and the ability to raise finance.

This article was first published in our Property Newsletter April 2012. If you would like to subscribe to our Property newsletter please email bh@boodlehatfield.com.

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London
SE1 8NW
DX 53 Chancery Lane

Telephone: +44 (0)20 7629 7411
Fax: +44 (0)20 7629 2621
Email: bh@boodlehatfield.com

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