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Changes to EPC regulations – for brokers and agents

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Most business transfer agents are undoubtedly already aware of the planned changes to the law on EPCs (otherwise known as Energy Performance Certificates). 

To recap, an EPC is a document required by business sellers and lessors that provides information on the energy efficiency and likely carbon dioxide (CO2) emissions from their premises.

An EPC, which lasts for 10 years, also provides recommendations on how to reduce energy use. 

These certificates were hitherto only required for residential properties, but the law has now been widened to include those business properties which have 'their own heating or conditioning units' that are been offered for sale or let.

The law

The law governing EPCs is the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2008, otherwise referred to as 'the Regulations'.

The Department for Communities and Local Government (DCLG) is in charge of amending the Regulations, to which it has already made a number of changes and is in consultation to make more changes.  

As it stands, clients of property agents or brokers must have an EPC in place if they wish to advertise their business for sale or let

Tweedie Brown, deputy chairman of EPC provider PSG Solutions lays out how this affects brokers:

"Brokers, I would say, have a professional obligation to tell their clients that their lawyers are the ones who must make sure that they can comply with the law," says Brown. "Any responsible broker should be advising their clients" of their obligations regarding the provision of EPCs on buildings they are selling or letting.

We recommend reading our comprehensive guide to energy performance certificates.   

The penalty fee for not having an EPC ready to show prospective buyers or tenants is fixed at 12.5% of the rateable value of the relevant building. Penalties range between £500 and £5,000.

The rumours

There are rumours that brokers' responsibilities will widen to ensuring that the properties they manage have an EPC in place. 

This would mean amending the law to make the 'relevant person' in charge of ensuring that the EPC is in place to include the agent or broker. Thus trading standards officers could require that agents produce evidence to demonstrate that an EPC has been commissioned.

Dean Edwards of Adams & Co is insists that "you can't divide responsibility and accountability" between agents and sellers when it comes to EPCs, and that "the relevant person hasn't changed - either the vendor or landlord" is still primarily responsible for the EPC, not the broker.

Edwards suggests that the DCLG may be satisfied with written evidence that an agent has asked their client to commission an EPC and been informed by the client that the EPC process is in place. 

Other proposed changes include an EPC needing to be 'secured' within seven days of request by a trading standards officer to avoid a penalty (the time frame used to be 28 days from such request). 

Perhaps because of the controversy of this change, amendments to EPC legislation have already been pushed back twice, with the date set for implementation currently set for April 2012. 

BusinessesForSale is continuing to monitor developments in the law on EPCs.

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