Energy performance certificates (EPCs) for domestic private rented properties are currently a main focus for the majority of landlords and lenders throughout the UK, with all properties let under new tenancy agreements requiring an EPC of C or above by 2025. This is an improvement from the current minimum of E or above.
However, the energy we use for heating and powering our non-domestic buildings is responsible for around 12% of the UK’s emissions. So, with new regulations for these commercial properties being introduced, lenders are now requiring that properties for new commercial applications should already meet future changes in the regulations.
How are regulations changing for Commercial / Non-Domestic?
Currently, as of 1st April 2018, landlords of these rented properties (including public sector landlords) may not grant a tenancy to new or existing tenants if their property has an EPC rating of band F or G.
From 1st April 2023, as well as new leases, non-domestic property which is already let must have an EPC of E or above. From our recent experience, lenders are already requiring to see EPCs as a pre-offer requirement. If you are considering refinancing your commercial property, then make sure you get the EPC booked in.
When must you display your EPC?
You must display an EPC by fixing it to your commercial building if all these apply:
- the total useful floor area is over 500 square metres
- the building is frequently visited by the public
- an EPC has already been produced for the building’s sale, rental or construction
When might your property be exempt from having an EPC?
You do not need an Energy Performance Certificate (EPC) if you can demonstrate that the building is any of these:
- listed or officially protected and the minimum energy performance requirements would unacceptably alter it
- a temporary building only going to be used for 2 years or less
- used as a place of worship or for other religious activities
- an industrial site, workshop or non-residential agricultural building that doesn’t use much energy
- a detached building with a total floor space of under 50 square metres
- due to be demolished by the seller or landlord and they have all the relevant planning and conservation consents
A building is also exempt if all of the following are true:
- it is due to be sold or rented out with vacant possession (therefore it is the responsibility of the new landlord to obtain an EPC before letting the property out)
- it is suitable for demolition and the site could be redeveloped
- the buyer or tenant has applied for planning permission to demolish it
If you register false or misleading information in relation to an exemption, you will receive a fine of up to £5,000 and publication of the penalty
To learn more about domestic EPCs – EPC update and what action do landlords plan to take (advocatefinance.co.uk)
How can Advocate Finance help you?
Do you have a property which you wish to refinance onto a green product? Or to capital raise funds for property improvements? Get in touch, as we may be able to help you.
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