What is an EPC?
An Energy Performance Certificate, or EPC for short, is a document which details how energy efficient a property is. You can also know in advance about your energy running costs on average for the whole year to come.
Do I need an EPC?
It is a legal requirement to have a valid Energy Performance Certificate in order to market your property for sale or rent which applies to both residential and commercial properties. It is now also a requirement to have a valid EPC if your property already has existing tenants in place. If you are looking to remortgage a property then the majority of lenders will request you have an EPC carried out on the property.
What happens if you do not have a valid Energy Performance Certificate?
If you do not have an Energy Certificate, or if your Energy Certificate has expired, you can be faced with a hefty fine. More specifically, if you are asked to present the Energy Performance Certificate by an inspector and you fail to do so, you will receive a penalty charge notice and defined action. The approximate fine for a home is £500, and for other types of properties, it could go as high as £5000.
What happens during the assessment?
A qualified and accredited Energy Assessor will visit the property to undertake the Energy Performance Certificate survey. They will need access to all rooms in order to accurately measure the property and examine the critical items on the property such as the heating/cooling systems, levels of insulation, the type and material of the window, lighting, etc. Once the survey is finished, the data is uploaded into a software program which then calculates both the current level of energy efficiency and also the potential efficiency rating.
How long does it take?
An Energy Performance Certificate survey takes on average anywhere from twenty minutes, for a studio apartment, to an hour for larger family homes. The main determining factor is the size of the property but the layout of the property is also a factor.
Can you fail an EPC?
If you are looking to sell a property then there are no minimum requirements, you simply need to have a valid Energy Performance Certificate. Rental properties now have a minimum requirement. If the property fails to meet the minimum requirement then you will not be able to move tenants in (see MEES below)
Your rating explained
The EPC certificate will grade the energy efficiency levels of the property with a rating from A-G; A being the most efficient, G being the least. Naturally, the higher the rating, the more energy-efficient the building is. Currently, the average rating for a home in the UK is D – E.
Note that if your EPC rating is low you may have to deal with an EPC Certificate cost. More specifically, if your rating is below E, it’s illegal to rent or sell your property. Not only that, but also a low rating like the one mentioned affects your home’s value.
Minimum Energy Efficiency Standards (MEES) Legislation
In April 2018, Minimum Energy Efficiency Standards came into force in England and Wales. MEES makes it a legal requirement for all privately owned properties to have an EPC rating of at least an ‘E’ before they are let. From April 2020, MEES will be extended to existing lettings of residential property and in April 2023 to existing lettings of commercial property.
MEES do not apply to:
Buildings not legally required to have an EPC.
These can include some listed buildings, places of worship, temporary properties, some HMOs (House of Multiple Occupancy) and holidays lets.
Short or very long terms lets.
MEES does not apply to rentals of less than six months or more than 99 years.
The Golden Rule.
For a landlord or a tenant to meet the qualifications of the golden Rule they must make the necessary changes in order to obtain an EPC rating of E or above. All improvements that are made to the property should be cost-effective and signed by an independent energy assessor. With regard to commercial properties, all investments for energy improvements must be cost-effective within a seven-year period. Please note that this needs very good research as not all assessors meet the same criteria.
The potential for negative impact on the property is another legitimate reason for MEES exemption. In this scenario, an independent qualified surveyor must judge that the necessary energy-efficiency improvements would reduce the property’s market value by more than 5%. As reasonable, an EPC Certificate cost is necessary.
Third party consent.
These types of exemptions are based not on the details of the property itself, but on the relationships between tenants and landlords. If a tenant, superior landlord or planning body either refuse consent for the improvements MEES requires, or require conditions that the landlord cannot comply with, the landlord can claim exemption. However, it is essential that you use all reasonable means to come to an agreement and gain consent before applying for this form of exemption.
Buildings occupied solely under licence.
MEES only applies to buildings occupied under a “Relevant Tenancy”. This includes an assured tenancy, a regulated tenancy and domestic agricultural tenancies. If the occupier is present only under a licence to occupy the MEES requirements will not apply as there is no tenancy.
Social housing schemes.
The regulations apply only to privately rented properties. Social housing is exempt from MEES regardless of its condition, quality, or EPC rating.
What happens after the EPC assessment?
After the assessment, the assessor will send you the Energy Performance Certificate and the recommendation report. The recommendation report will give recommendations on how energy efficiency can be improved on the property. Once the Energy Certificate has been issued, it will then be added to the EPC Register Online. The Energy Certificate is essentially a report of energy management, reporting how energy efficient a residential or commercial premise is.
Since it was first introduced in England and Wales in 2006, the EPC is now a legal requirement for a building to be sold, let or constructed. Once the Energy Performance Certificate is issued, it is the owner or landlord’s responsibility to keep it up-to-date.
If you choose to use an estate agent to market the property, they must include a copy of the EPC report in all commercial advertisements such as a brochure and website, etc. With a new building, the builder in charge of the construction is responsible for producing the Energy Certificate. If you choose to market privately, the EPC is still a legal requirement for both sales and lettings.
Minimum Energy Efficiency Standards (MEES) Legislation
In April 2018, Minimum Energy Efficiency Standards came into force in England and Wales and has made it a legal requirement for all privately owned properties to have an EPC rating of at least an ‘E’ before they are sold or let.
If an agent is marketing the property, they must include a copy of the EPC reports document in all commercial advertisements such as a brochure and website, etc. With a new building, the builder in charge of the construction is responsible for the establishment of an original Energy Performance Certificate. And the Energy Certificate can only be produced by an accredited on-construction domestic energy assessor.
What are the benefits of getting an Energy Performance Certificate?
The Energy Performance Certificate includes recommendations of ways you can improve your property’s energy efficiency and as a result, to help the environment as well as to save you money.
What the Energy Performance Certificate does not include
The report is simply a commentary of the current energy efficiency and the future potential. It should not be used as a condition report on either the building structure or any of the internal systems in the property.