When is an Energy Performance Certificate not required in relation to commercial property?

Specialist commercial property solicitor, Ben Jerome, takes a look at when an Energy Performance Certificate is not required in relation to commercial property.

One of the more frequently asked questions encountered from property owners, investors, and tenants alike, concerns Energy Performance Certificates (EPCs). While EPCs have become a standard requirement for many types of commercial property transactions, the specifics of when an EPC is not required are often unclear. This article is designed to shed some light on the circumstances in which an Energy Performance Certificate is not required in relation to commercial property.

What is an Energy Performance Certificate (EPC)?

An Energy Performance Certificate is a document that provides information about the energy efficiency of a building. It includes an energy efficiency rating from A to G, and outlines recommendations for improving energy performance. In the overwhelming majority of cases EPCs are mandatory for buildings that are being sold, rented, or constructed.

For commercial property owners and landlords, the EPC can have significant implications. Not only does it impact the ability to lease or sell, but failing to provide an EPC when required can lead to financial penalties and enforcement action.

Commercial property: when is an EPC is not required

Despite the general requirement for EPCs, there are notable exceptions and exemptions. Outlined below are some of the most frequent scenarios where EPCs are not required for commercial property:

1. Buildings that do not use energy to condition their indoor climate
   Properties that do not use energy to condition their indoor climate are not required to have an EPC. This means a building that has no heating, ventilation or air conditioning equipment does not require an EPC.
2. Buildings that have a floor space of less than 50 Square Metres
   EPCs are not required for commercial premises that are detached and very small –those with a floor area of under 50 square metres. This exception is particularly relevant for smaller retail outlets or offices that do not meet the size threshold.
   However, it’s important to note that even though an EPC might not be required for a building of this size, the property still needs to comply with other energy-related regulations, such as building regulations for energy performance when undergoing significant renovation or development.
3. Temporary buildings
   Temporary structures that are in place for less than two years are generally exempt from the EPC requirement. These could include things like temporary retail stalls, construction site offices, or seasonal event hubs that are set up for short-term use.
   However this exemption does not apply to buildings that are intended for longer-term use even if they are only in place for a few years.
4. Certain religious buildings
   Places of worship, such as churches, mosques, synagogues, and temples, are exempt from needing an EPC. The reasoning behind this exemption is that these buildings are often not used in the same way as commercial properties and may not have the same kind of energy usage.
   In addition to religious buildings other types of buildings with significant cultural or social heritage protection, such as listed buildings or scheduled monuments, may also fall into this exemption category.
5. Listed buildings and buildings of special architectural or historical interest
   In certain circumstances listed buildings or buildings of special architectural or historical interest may be exempt from the need for an EPC. This exemption is provided to protect the integrity of the property or premises as implementing energy-efficiency measures may be difficult or disruptive to the heritage value of a given building.
   The level of protection can vary depending on the type and grade of listing (e.g., Grade I, Grade II). For these properties owners must take care to understand both their obligations and the extent of this exemption. In some cases, it may be necessary to conduct a heritage impact assessment to determine whether an EPC can be implemented without compromising the building’s significance.

Commercial property EPCs: conclusion

Energy Performance Certificates (EPCs) are an important tool in driving energy efficiency and sustainability in the commercial property sector, but as this article outlines, there are several situations where they may not be required. Property owners, landlords, and investors must be aware of the exceptions to avoid unnecessary costs and financial penalties.

While exemptions exist, it’s important to remember that even if an EPC is not mandatory, property owners still have obligations to comply with other energy regulations, especially when it comes to renovations, lease agreements, or significant alterations. As energy legislation evolves, particularly with the growing emphasis on sustainability, it’s always a good idea to consult with a legal professional who is up to date on with local energy regulations to ensure compliance.

Navigating these requirements can be tricky, and understanding when an EPC is not needed can save time and resources. If you find yourself in doubt, it’s wise to seek expert advice to avoid any potential pitfalls.

If you have any questions relating to the sale, purchase, or lease of a commercial property, Holmes & Hills have a specialist team of commercial property solicitors able to assist you.