Commercial EPC Exemptions
Could your building be EPC Exempt?
Listed or officially protected buildings
Temporary buildings
Places of worship
Low energy use buildings
Small detached buildings
Buildings due for demolition
Cost-Effectiveness
All improvements made
Wall insulation exemption
Consent
Devaluation
New landlord
Due to the rich diversity in the built environment in this country there needs to be another option for some buildings when the standard Energy Performance Certificate doesn't quite fit the bill.
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It is possible to gain an exemption, this is done by gathering evidence and submitting it to the PRS Register - something we're well placed to help you with. However we would raise a word of caution from the outset to any landlords seeking a quick or cheap fix, a normal EPC is often required as part of the evidence gathering and the evidence gathering can be quite onerous. To be on the safe side consider if you really have the basis of a convincing exemption by considering how well the following apply to your building:-
If a commercial building is listed or officially protected, and adhering to the minimum energy performance requirements would significantly alter its character or appearance, it's exempt from having an EPC​​. This sounds straightforward but is often confused by many commercial property agents to simply mean "listed buildings are automatically exempt" - they are not. The EPC first needs to be conducted and the results used to justify an exemption application.
Buildings intended for use for 2 years or less are exempt from requiring an EPC​. Think large wedding marquees in hotel grounds, portakabins etc.
Buildings used as places of worship are also exempt from the EPC requirement​, not however if they were historically a religious building which has since been converted into a normal commercial space.
Industrial sites, workshops, or non-residential agricultural buildings that don’t use much energy are exempted​. Barns yes, barn-conversions no.
Detached buildings with a total floor space under 50 square meters are exempt from requiring an EPC​​. Entirely coincidentally this is often exactly the size chosen by roadside Coffee shops.
Buildings due to be demolished by the seller or landlord, provided they have all the relevant planning and conservation consents, are exempted. Additionally, if a building is due to be sold or rented out with vacant possession, is suitable for demolition, and the buyer or tenant has applied for planning permission to demolish it, it's also exempt from having an EPC​.
Also known as the '7 year payback' exemption, if the recommended energy saving measures from an EPC can be proven to not pay for themselves in 7 years then the building is liable for an exemption. With the rising cost of electricity this is less and less likely to be feasible.
If all improvements recommended in an EPC have been made and the building still somehow scores less than an 'E' rating it may be exempt.
Is a highly technical exemption regarding the suitability of some wall insulation systems in buildings, requires an Architect to give evidence on behalf of the landlord, please contact us for further information.
This exemption is possible if improvements to the building would require (but do not receive) the consent of a third party.
If a RICS surveyor is willing to agree with you that a recommended improvement would lead to a drop in the value of your property by at least 5% you may claim a devaluation exemption.
The Definitive list of Commercial EPC Exemptions
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The regulations recognise that some people or companies that suddenly become a landlord under very specific circumstances should not be expected to bear the responsibility for the EPC or improvement thereof for six months. The circumstances are as follows:-
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where the tenant becomes insolvent and the landlord has been the tenant’s guarantor (in this situation, the tenant’s guarantor becomes a landlord when taking over the lease)
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the landlord has been a guarantor, or a former tenant, who has exercised the right to obtain an overriding lease of a property under section 19 of the Landlord and Tenant (Covenants) Act 1995 (for the avoidance of doubt, a “guarantor” who exercises this right under the 1995 Act is the guarantor of a former tenant)
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a new lease has been deemed created by operation of law
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a new lease has been granted under Part 2 of the Landlord and Tenant Act 1954
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a new lease has been granted by a court order, other than under Part 2 of the Landlord and Tenant Act 1954.
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A person becomes the landlord on purchasing an interest in a property and, on the date of the purchase, it was let on an existing tenancy.
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the grant of a lease due to a contractual obligation (this is intended to cover a situation where a contract was entered into on a contingent basis, regardless of whether it was entered into before or after the Regulations came into force)
If you feel any of the above apply to your property do please contact us today for an informal free discussion. Should you wish to proceed we can collate your evidence into the correct format, seek expert testimony where applicable and provide our own corroborating facts regarding the EPC status of your building.
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For all further reading we recommend the official Gov.uk site