COVID-19: What if we need an EPC?
As has been the case for many years now, obtaining a valid Energy Performance Certificate (EPC) is a legal requirement when selling or letting both domestic and commercial properties (subject to limited exceptions) and this requirement extends to tenants who wish to sub-let and assign an existing lease. In addition to this, it is an offence to grant, extend or renew a lease of a commercial property with an EPC rating below an E.
As it stands, a seller or lessor is required to use all reasonable efforts to obtain a valid EPC within 7 days of putting the property on the market. If this has not been possible, a further 21 days are permitted, after which enforcement action can be taken, including fines of up to £5,000.
EPC assessments are conducted onsite by an accredited assessor; something that be might prove tricky whilst the Government advice to stay at home and socially distance remains in situ. Given that it might be more important than ever for landlords and tenants alike to get transactions over the line in a timely manner, has the Government temporarily relaxed this requirement?
In short, no and a valid EPC remains a legal requirement when selling or letting. Any transaction which is not exempt risks enforcement action if it goes ahead without one.
The government advice regarding obtaining an EPC during this time is set out below, inevitably, it is geared towards domestic properties but the principles can equally be applied to commercial premises:
- EPC assessments can continue in cases where the property is vacant. This is good news for commercial premises and particularly for office occupiers, who are likely to have vacant space whilst their staff work from home.
- EPC assessments should only be conducted in accordance with government advice and where the EPC assessment can be conducted safely.
- Where a property is occupied, parties must endeavour to agree that the transaction can be delayed, so that an EPC assessment can proceed when the Government measures are lifted.
- If moving is unavoidable and the parties are unable to reach an agreement to delay, an assessment may be conducted. In these circumstances, government guidelines on social distancing must be followed alongside the guidance for carrying out work in people’s homes.
- No assessments should take place if any person in the property is showing symptoms, self-isolating or being shielded. Even if securing an EPC is critical, the appointment should be rescheduled to when it is safe to do so in accordance with Government guidelines.
Therefore, if you are thinking of granting a lease or assigning or underletting your property:
- Remember that EPCs are valid for ten years so check if you or your Landlord already has one you can pass on.
- If you have a valid EPC but have altered your property since it was issued, keep in mind that you might need a new EPC if the works could have affected the property’s energy efficiency (something that the terms of your licence for alterations or lease might also require).
- Don’t let obtaining an EPC hold up your transaction, if you are considering letting a vacant property, think about booking in an EPC assessment as soon as possible whilst it can be done. This will avoid delays if there is a backlog of bookings once businesses can move again.
- If the property is occupied and the transaction is not critical, make sure that you prioritise an assessment as soon as social distancing measures are reduced.
- Always remember that in any event, you have 28 days from the date the property is first put on the market before facing the risk of enforcement action. Therefore, whilst you should factor in obtaining an EPC and any associated delays caused by social distancing measures, it may be that this is a sufficient amount of time – particularly if the property is vacant.
News & Insights
Capital Gains Tax: Cutting through the speculation
Join us as we discuss current speculation and client reaction in relation to capital taxes.
Relief from forfeiture – delay of less than six months unlikely to be fatal to the grant of relief from forfeiture
Reviewing a recent case of Keshwala and another v Bhalsod to get a better insight on relief from forfeiture.
On 18 September, the FCA set out its approach in assessing applications by cannabis-related companies for listing in the UK.