Since their introduction almost 10 years ago, energy performance certificates (EPCs) have been regarded as little more than irritating pieces of paper that have to be obtained before a property is sold or let. This will change in April 2018 when Minimum Energy Efficiency Standards (MEES) take effect.
As currently drafted, MEES will apply to both residential and commercial properties. For residential properties, the position is unclear following the abrupt closure of the Green Deal last summer. Commercial landlords, on the other hand, will not be allowed to let properties with an EPC rating of F or G unless they have made any necessary cost-effective energy improvements (those that pay for themselves within seven years) to bring the rating up to E, unless one of the exemptions applies.
MEES will not apply unless a building has an EPC. Furthermore, if a building is of a type that does not need an EPC, MEES will not apply to it even if it has an EPC. So it has become particularly important to identify which types of property do not need EPCs. There is a list in the relevant regulations, which includes “buildings officially protected as part of a designated environment or because of their special architectural or historical merit, in so far as compliance with certain minimum energy performance requirements would unacceptably alter their character or appearance” (emphasis added).
But what does it mean? Assuming that this is referring to conservation areas and listed buildings respectively, it still does not make sense because of that bizarre phrase in italics, which is lifted verbatim from the relevant EU directive. At first sight, it appears to make sense if we are considering an EPC in the context of MEES – but MEES only applies to buildings that need an EPC, so that is putting the cart before the horse.
So is an EPC needed for the sale or letting of a listed building or not? The Historic England website says not, and I think that was the government’s original intention. My belief is that the mysterious phrase was incorporated accidentally in the UK regulations. This needs to be corrected urgently because currently it is impossible for anyone to say definitively whether an EPC is needed for the sale or letting of a listed building – and therefore whether MEES will apply.
Peter Williams is a professional support lawyer in the real estate group at Shoosmiths LLP
