Commercial property for sale or rent. No EPC yet? That used to mean nothing particularly bad: a complaint at worst.

Now, it’s getting a bit more serious. There’s a law change on the way, with tougher penalties and easier triggers on the way. And there really isn’t long to comply (although it’s not as bad as… see bottom of this post…)

Compliance on commercial EPCs is amazingly low

For a whole year now, it’s been a legal requirement to have an EPC available on any commercial property for sale or rent. So everybody must be doing it, right?

Well, according to the NHER’s report, there’s plenty of “anecdotal evidence” from assessors that not everybody is. Far from it. As shown by research carried out by Quidos, compliance on commercial EPCs could be as little as 17%.

Fast-track changes to the EPBD

That’s all set to change with the news this week that the EPBD…

the main Community legal tool that provides for […] effective improvement of the overall energy performance of buildings

…is due for a fast-track update. Details are still being finalised, but agents in breach of their EPC responsibilities will face stricter fines and more likelihood of penalties.

This will impact on agents in several ways, not just the ones who are already lax in getting their commercial EPCs in place.  No agents want Trading Standards Officers peering over their shoulders – it’s bad for business even if they are squeaky clean. So an increase in across-the-board compliance is in everyone’s interests.

First… how bad is current EPC compliance?

Point of law: all commercial buildings being marketed for sale or rent should have an EPC available to inform prospective buyers and tenants about the energy performance of the building.

However, in research carried out by Quidos (no direct link to the report available, although ask me and I’ll forward it), the number of lodged commercial EPCs compared to the number of commercial properties advertised for sale in Bristol, Bath, Wiltshire and Cornwall was between 17% and 27%.

Agents in Bath (26.75%) fared a lot better than those in Wiltshire (17.39%), but when that still leaves nearly 3 out of 4 commercial properties on the market without an EPC, that’s not saying a lot…is it?

Why aren’t more agents compliant?

Mainly because nobody thinks the buck stops with them.

Using a mystery shopper approach, the NHER decided in June 2009 to find out why so few agents could offer a commercial EPC when asked:

• Almost half (47% – 41 agents) said they believed an EPC was not necessary, or that they just didn’t know.
• A further third (36% – 32 agents) said that they would only get an EPC at the point of sale.
• 17% (15 agents) said that they believed the EPC was in the process of being undertaken.

Response 2 suggests ignorance of the precise rules, i.e. that an EPC should be available from when the property is first marketed. Responses 1 and 3, though, highlight the main underlying cause of the lack of EPC compliance: the belief that it’s someone else’s issue.

How will the EPBD update change this?

The update clarifies that the agent is responsible, and makes two new provisions:
1. Anyone — i.e. Trading Standards Officers as well as potential purchasers — can ask to see the EPC

2. Increased penalties: a full 12.5% of the rateable value, much higher than before.

So now, a “forgotten” commercial EPC means what?

A fine worth avoiding; an unwelcome trading standards spotlight on the agency; and all for lack of a certificate that’ll be valid for 10 years anyway.

When’s the new law coming in? 

Feburary: it’s being fast-tracked as I write.

That leaves just a few weeks to comply if you don’t want Trading Standards nosing around.

Thankfully though, that’s neither as brief nor as bad as this Robocop moment.