New green property law is a ‘ticking time bomb’ says Mace & Jones Specialist

Published: 8th October 2007

New property regulations are being introduced which mean that investments could reduce in value if buildings fail to go 'green'.

The warning comes from a property expert at NW law firm Mace & Jones, who says that many commercial landlords are unaware of looming changes in property law.

By next April, commercial property with a floor area of over 500m2 or public buildings more than 1000m2 must have an Energy Performance Certificate before selling or renting. The certificate will grade a building between A and G according to factors such as the age of the building, roof insulation, double glazing, lighting systems, heating, ventilation, air conditioning and economical use of water as well as carbon dioxide emissions per square metre of floor space.

All other owners and occupiers have until October 2008 to acquire their Energy Performance Certificate.

Property specialist at Mace & Jones, Amanda Hurst, explained: "We have discovered that many commercial property owners and occupiers think that these certificates apply only to domestic home owners putting together their HIPs - or Home Information Packs.

"But the Government's aim is to make all property owners aware of their responsibility to the environment - to help them meet their target on reducing carbon dioxide emissions.

"The Energy Performance Certificates will be a legal requirement for business property owners and those who flout the law could face severe penalties."

A follow-on from the new rules is that buildings may fall in value if they score badly in energy efficiency assessments, added Amanda.

"These certificates will radically change the market place as buyers and tenants will be able to weigh up the cost of maintenance - as well as the cost to the environment - when deciding where to buy or rent. It will make commercial sense to cut down on energy waste."

By October 2008, all the necessary information about the buildings should be collated and an accredited energy assessor employed to produce a certificate and advisory report. The energy assessor must register the documents, which will be stored for at least 20 years.

This requirement will later be followed up by regimes imposing inspections of existing air conditioning systems over 250kw in early 2009 and over 12kw in early 2011.

Amanda said "My advice is to start collecting the information straight away; and also to assess the cost to your company of commissioning the certificates. You will need to employ an accredited energy assessor - but as these do not yet exist you will have to identify companies who understand the issues and can give practical guidance. There is also the question of who will end up paying for the certificates and whether this is a landlord cost or whether this is a cost which can be passed on to the tenant."

Exempt from the rules are: buildings used primarily or solely for worship; temporary buildings with a planned time of two years or less; industrial sites, workshops and non-residential agricultural buildings with low energy demand; non-dwelling stand-alone buildings of less than 50m2.

The UK has implemented an EU directive through the Building and Approved Inspectors (Amendment) Regulations 2006 (the 2006 Regulations) and the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007 (the 2007 Regulations).

More information is available from the Department of Social Development at: http://www.dsdni.gov.uk/