commercial epc’s

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August  2011 update  -  changes to EPC legislation

From September / October 2011 the legislation covering  EPC's will be extended to all commercial sales and lettings. Landlords and Agents will be required to provide the certification within 7 days not 28. 

Inspection will also be tightened so that Trading Standards can require selling and letting agents to produce evidence that an EPC has been commissioned  

The regulations will be amended to remove the provision that an EPC can be provided at any time up to exchange of contracts and the EPC must be attached to written particulars for commercial premises marketed for sale or rent.

It has never been more important to ensure you comply with the Energy Performance Certificate regulations so speak to one of our specialists now. You can e-mail us at RL@ritchielambor.com  ring us for a chat on: 0207 593 0493  /  01273 710 707
or click here to fill in our quote form

Executive Summary, 4 January 2009

From today, 4 January 2009, it has now become a legal requirement to provide a Commercial Energy Performance Certificate (EPC) with the sales particulars for any commercial property that is to be marketed for sale or to let in England and Wales. All properties need an EPC before being laced on the market.

The Commercial EPC comes in two parts, the now familiar ‘fridge’ style graph and 8 pages of recommendations the EPC rates the energy efficiency of the building by applying zoning methods to calculate the energy efficiency of the building and estimating how much carbon dioxide escapes into the atmosphere. It will give each property (or part of a property) a rating from A-G.

Unlike the EPC software used for residential property, the Commercial EPC software makes many fewer assumptions, so the Commercial Energy Assessor has to collect much more data and comment on the fabric of the building and the services in much more detail. The Commercial Energy Assessor has to be more qualified and skilled and the whole energy assessment process takes significantly longer.  The result being that the Commercial EPC is significantly more expensive than its residential counterpart. Fees will vary from £350 to £3,000 per building, depending on the size, complexity and heating and cooling facilities of the building. The agent marketing the property must provide an EPC with the sales particulars and free of charge, to all prospective purchasers or tenants. Failure to do so would make the property owner liable to a fine from the local trading standards officer of between £500 and £5,000 based on rateable value of the property concerned.

The Commercial EPC can only be carried out by a qualified Commercial Energy Assessor.

RitchieLambor provide comprehensive, professional Commercial EPC Certificates throughout London, Sussex, Surrey, Hampshire and Kent on all types of commercial buildings. The reports also contain recommendations as to how to improve the energy efficiency of the property and achieve a higher grading. This should improve saleability by making the building cheaper to run and with a lower carbon footprint.

Commercial Energy Assessor London, Sussex, Surrey and Kent is the area and location we specialise in but we can provide this service throughout the UK.

Commercial EPC London Brighton Croydon and surrounding towns are where we have done much of our work to date.

We have one of the largest teams in the south east and offer a competitive and fast service to our clients. Call Craig Ritchie or Maggie Harris on 0207 593 0493.

Commercial EPC’s:  What are they?

A Commercial EPC is effectively a 5 page document that;

a)   Expresses the energy rating of the building  (A [highest]  -  G [lowest] and a numerical value).

b)   Contains the total useful floor area, address of property, name and address of the Energy Assessor and the date it was issued with a registered reference number.

c)  Is accompanied by a recommendation report with suggestions of how the energy rating could be improved in the short, medium and long term.  

The purpose of the EPC is intended to inform new buyers or tenants of a building about the energy performance of a building so they can consider energy efficiency as part of their investment/business decision to occupy that building.

When do EPC’s  become Law?

For all commercial properties the regulations will apply from 4th January 2009.

So when do they need to be provided?

The commercial EPC must be provided by ‘the relevant person’ at the earliest opportunity and in any event before entering into any contract to sell or rent a building.

The regulations state that an EPC for all commercial property that is to let or for sale should be provided with the sales particulars or upon the first viewing whichever is the earlier.

In the case of auctions, the EPC should be available in the pack and if room sizes are mentioned in the catalogue, then the energy rating should be shown.

Who is responsible for obtaining an EPC?

The regulations refer to a ‘relevant person’ as the person who is responsible for obtaining an EPC. The relevant person is referred to as either ‘the seller’ when a building is being sold or ‘the prospective landlord’ when a building is being rented out.

The regulations apply where the written particulars are given by the relevant person or another person on his behalf. The person giving the sales particulars must ensure that they include an asset rating of the building or attach an EPC to the sales particulars. The sales particulars are described as any document containing two of the following; a photograph of any room in the building, a floor plan, a description of the size of the rooms. This includes electronically provided information.

On an assignment, the assignor or tenant selling his lease, is deemed the seller and is, therefore, the ‘relevant person’ and it is their responsibility to provide the EPC.

What if they don’t?

If the relevant person or his/her agent does not provide a commercial EPC upon inspection or with sales particulars then he/she is liable to a fine from the local weights and measures authority (trading standards officer). The officer can ‘require a person who appears to him to be subject to any duties under the regulations to produce a copy of a valid EPC at any time up until 6 months after the marketing took place’.


The fine is based on a number of criteria but is mainly calculated on 12.5% of rateable value between a minimum of £500 and a maximum of £5,000.

You have defence against a penalty charge notice if you made a proper request for an EPC to an appropriate person at least 14 days before it was required and despite all reasonable efforts, you have not received a valid EPC at the relevant time.

How long is it valid for?

The EPC is valid for 10 years unless major modifications have been carried out to the property in that time period.

Who can provide an EPC and what do they do?

An EPC can only be carried out by a qualified Energy Assessor. An energy assessor has to attend specific training, pass exams and carry out several monitored energy reports before he/she is accepted on a government approved accreditation scheme. This normally takes about 6 months in total.  In our office all of our energy assessors have trained with the Building Research Establishment (BRE).

The basic standard is a level 3 assessor who is qualified to provide EPC’s for an estimated 75% of commercial properties in England and Wales. They cannot assess properties with a more complex heating or cooling system, typically air conditioning.

A level 4 assessor can carry out EPC’s on the vast majority of commercial properties. Highly complex building such as shopping centres with say an atrium etc. can only be carried out by a level 5 assessor.

The commercial energy assessor works with a standard government software system that is referred to as SBEM. This is a much more complex system than the one used for generating EPCs for existing residential properties, which is a reduced data SAP system.

The energy assessor will record and assess the thermal efficiency of the fabric of the building the walls, roof, floors, windows, etc; and all the services including heating, lighting, cooling, ventilation, type of switches, etc. The building is zoned in some detail based on activity and energy usage of that zone.  This data is then entered into the software and the final assessment is made.  A number of recommendations will be generated to which the assessor may add some of their own.

The main cost of the commercial EPC reflects the level of skill and knowledge of the commercial energy assessor (who needs significant property knowledge before commencing the course) and the time it takes to record all the relevant data and input it into the software to obtain the EPC. This will rarely take less than a day.

How can you help us?

Some things can speed up the preparation of the EPC and may help reduce the cost or the time it takes to prepare.  This includes the provision of any CAD drawings of the property, if available. Any detailed information of the services used, boiler type, cooling system etc. is also helpful.

On more complicated buildings the more information we have the better EPC grading we can obtain for you. If we lack information we may have to make a worse case scenario which could lower the EPC.

We have many examples in recent months where we have worked with clients who perceive that the EPC can be used for marketing purposes and we have worked with them to improve the EPC rating and thus make the building more lettable / saleable.

How might we help you?

Firstly by speaking to us before you commission an EPC we can advise what you need. Or importantly if we can, we will advise that you don’t need an EPC. (Which we are doing about 20% of the time at the moment).

Secondly our very knowledgeable and skilled energy assessors – all with other property qualifications – can work with you to obtain a more Carbon neutral building which will reduce energy costs help reduce CO2 emissions and make your building more marketable. 

It may be that you decide to carry out some of the recommendations we make that could improve your EPC rating and thus make your property more saleable / lettable. Some of the recommendations may be cost prohibitive, others not. By working with our Commercial Energy Assessors it may be possible to improve, in the short term, or demonstrate to potential tenants/occupiers how in the medium term the EPC rating could be improved. This would reduce the energy costs of the building and reduce the carbon footprint and therefore make it a more attractive building, which should improve the saleability / lettability.

For example, of the Commercial EPC’s completed in 2008 so far the following have been the most common recommendations made; use more energy efficient lighting, use more solar control measures (reflective coating/shading devices), introduce electronic controls to improve efficiency of fluorescent lighting, consider solar water heating, review boiler. 

So are any buildings exempt. Can I avoid an EPC?

Yes, the government guidance notes refer to a building requiring an EPC if;

It has a roof and walls

It uses energy to condition the indoor climate.

In practice, this excludes buildings from needing an EPC if they have no heating, mechanical ventilation or air-conditioning.  So if a buildings only power is used for light and hot water an EPC should not be necessary.

This second is important and often a building with no central heating will not require an EPC.

Also, no EPC is required for a sale of shares in a company where buildings remain in company ownership.

The following are also exempt: places of worship, buildings that are intended to exist for less than two years, agricultural buildings and some basic workshops with low energy demands.

Also detached buildings of less than 50 sq m (550 sq ft) are exempt.

Finally where it can be demonstrated that a building is suitable for demolition or redevelopment it could be exempt. In this instance the property should have appropriate planning consents etc or the seller has reasonable grounds to believe that a prospective buyer intends to demolish the building.

Rather unfairly in our opinion it seems that an office building being sold with planning consent to convert to 8 flats would still need an commercial EPC as an office.

The relevant word in this section of the legislation is ‘demolish’.

A commercial EPC will not be required for a lease renewal or a lease extension or  surrender or under a compulsory purchase order. ‘i.e. transactions that do not involve a new owner or tenant may not require an EPC’.

What about Investment Sales?

All sales of property require a commercial EPC upon marketing. This includes any freehold investment sale subject to a tenant in occupation on full repairing and insuring terms. The idea is that the potential investor can use the energy assessment as part of their investment decision making process.

What about Multi-let Offices?

The situation with regard to multi-let offices is complex and runs to 8 pages in the government guidance. The general rule is ‘The EPC must reflect the accommodation on offer.’

We recommend you ask us to advise on specific instances.

It may be appropriate in the case of a multi-let office to obtain one EPC for the entire building and then use that for all the suites if there is a common heating system.  Alternatively, in the case of sub-letting, then an EPC can be prepared on part of a property, but the assessor will need details of the main heating plant.  However, if there are many heating systems, then an EPC should be prepared for each part offered for sale or let.

Can the cost of an EPC be re-claimed on the service charge?

This will as usual depend on the terms of the lease. New leases should deal with this new legislation.

What about shops with residential above?

If the flat/maisonette is self-contained then a separate domestic EPC is required for the flat (which we can also supply).  If it is not self-contained then it will be included in the commercial EPC for the shop.

We have already come across situations where an inappropriate commercial EPC had been commissioned for an entire building for £400 plus VAT when in fact the commercial premises did not need an EPC and the upper floor flat needed a residential EPC for £70.

What about guest houses and houses in multiple occupation?

A guesthouse will require a commercial EPC as it is regarded as a commercial property under the directive. Likewise most HMO’s.

Why are we having Commercial EPC’s anyway?

Greenhouse gases contribute to global temperatures through the greenhouse effect. Greenhouse gases are produced by many natural and industrial processes. Current levels of CO2 are approximately 25% higher than during pre-industrial times, when direct human influence was negligible. There is a general view that it may get a bit too hot on the planet to sustain human life!

The greenhouse gas caused by human activity is predominately carbon dioxide. It is estimated that 50% of all UK carbon emissions come from UK property. Commercial property (or non-domestic as the government refers to it) accounts for just under one fifth or 20%.

The UK Government has agreed with The European Union Energy Performance of Buildings Directive to promote the improvement of energy performance of buildings within the Community. Each EU member state is required to transpose the Directive into law by the beginning of 2006 with a further three years being allowed for full implementation of specific articles. This gives the UK until the beginning of 2009.

The UK Government has established its commitment to addressing climate change through legal instruments. These include the Kyoto Protocol, Energy White Paper, Building Regulations and Sustainable Development Strategy. The Energy Performance of Buildings Directive is another implemented in line with these commitments and is where EPC’s come in.

The specific laws and rules relating to Commercial EPC’s are set out in The Energy Performance of Buildings Regulations 2007. (Statutory Instrument 2007 No. 991 (twice amended))  


Craig Ritchie B Sc MRICS 4 January 2009

This is not a legal opinion and just a guide aimed to inform. Whilst due care and attention has been put into this report please do not base any commercial decision on the information contained herein without further appropriate verification of the legislation. Where an opinion has been given it is the personal opinion of Craig Ritchie only. Copyright Craig Ritchie 2009