Last updated 05:34, Friday, 06 June 2008

EUROPEAN legislation is driving further reform in the commercial property sector.

Moving into the future: Building owners will have to meet the cost of employing an energy assessor to survey their property but the certificate will be valid for 10 years (assuming the building and its fixed services are not altered)

The Energy Performance of Buildings Directive means that energy performance certificates (EPC) will soon be necessary for all commercial buildings when built, sold or let.

An EPC ranks a building according to its energy efficiency, giving an A-G rating (where A is the most efficient) similar to those seen on white goods such as washing machines. An EPC is already a familiar document to the property industry, as the basis for the controversial Home Information Packs (HiPs).

Building owners will have to meet the cost of employing an energy assessor to survey their property but the certificate will be valid for 10 years (assuming the building and its fixed services are not altered).

We shall have to wait and see whether the extra costs incurred in achieving a good efficiency rating will lead to higher rental income or sale prices for property owners. Market factors such as location, condition, suitability and supply and demand are likely to be the most influential.

If anything, buyers and tenants might in future argue for a price or rent reduction for a poorly-rated building. As a consequence, owners are likely to see this as yet more regulation and cost. Some types of accommodation are excluded from the EPC rule. For example, new residents in a care home would not normally need to be given an EPC, nor would residents in a hotel or purpose-built student accommodation.

The guidance on exceptions is complex so it is worth taking advice. The Directive also includes the requirements for air conditioning systems to be inspected at five yearly intervals and for public buildings to display a certificate showing the building’s energy usage.

The phased introduction of the EPC began with dwellings. Commercial buildings with a floor space over 10,000sq m were caught from April 6. On July 1, EPC’s will be extended to buildings with a floor space over 2,500sq m. On October 1 all remaining buildings will be covered.

Further guidance is available in the planning, building and environment section of www.communities.gov.uk.

Tony Lake is a partner in Burnetts’ commercial property department. To find out more about buying, selling or letting commercial property, contact him on 01228 552222 or visit www.burnetts.co.uk