Display Energy Certificates (DEC’s)
The Law
The EU introduced the Energy Performance of Buildings Directive (EPBD) in 2003. The UK Government followed with the Energy Performance of Buildings (Certificates and Inspections) Regulation in 2007.
What is a DEC?Commercial and public sector buildings contribute over 20% of the UK’s carbon footprint.
The introduction of Display Energy Certificates (DECs) for public buildings is part of a series of legislation to dramatically improve the energy efficiency of the UK’s building stock, both new and existing.
A DEC shows the energy performance of a building based on actual energy consumption. The rating is an indicator of the annual CO2 emissions caused from operating the building. This rating is shown on a scale from A to G, where A is the lowest CO2 emissions (best) and G is the highest CO2 emissions (worst). Also shown on the certificate are the ratings for the previous two years; this provides information on whether the energy performance of the building is improving or not. The rating is based on the amount of energy consumed over a period of 12 months and is taken from meter readings.
Valid Period
The DEC must be updated annually with the previous 12 month’s energy data reflected. The first year’s DEC is accompanied by an Advisory Report which highlights basic recommendations to improve the energy performance of the buildings (such as building fabric and services). The Advisory Report is valid for seven years.
Responsibility
It is the legal responsibility of the occupier of the building to comply with these Regulations. The occupier must display a valid DEC clearly visible to the public. A DEC is required for all buildings with a gross internal floor area (GIA) over 1,000 sq m, that are occupied in whole or part by public services and that are frequently visited by the public.
EPCs v DECs
Energy Performance Certificates (EPCs) are now commonplace. In fact almost 20% of the UK’s entire building stock has an EPC energy efficiency ‘stamp’. EPCs differ greatly from DECs. An EPC is a notional energy performance rating and assumes that the building will be properly operated. A DEC shows actual energy performance based on real energy data. DECs can only be produced for occupied buildings where energy is being used. Many people consider a DEC to be a far more powerful tool for improving year-on-year energy efficiency. If an EPC also exists for a building it must be recorded on the DEC for all to see.
Public Database
The Regulations require that all DECs are lodged on the UK Government’s Landmark database where they can be freely inspected by the general public. This public accountability is designed to encourage building occupiers to improve the energy efficiency of their buildings.
Non compliance
The penalty for failing to display a DEC at all times is £500. The penalty for failing to have a valid Advisory Report is £1,000. The Regulations are enforced by local Trading Standards officers who can repeat the penalty every 28 days of non-compliance. Organisations also run the risk of severe reputational damage for failing to comply with this important environmental legislation.
Commercial Energy Performance Certificates (EPC’s)
The EU introduced the Energy Performance of Buildings Directive (EPBD) in 2003. The UK Government followed with the Energy Performance of Buildings (Certificates and Inspections) Regulation in 2007.
Commercial buildings contribute 20% of the UK’s carbon footprint. EPCs are part of a series of legislation to dramatically improve the energy efficiency of the UK’s commercial building stock, both new and existing.
What is an EPC?
An EPC is a measure of the notional energy performance capability of a building. The energy rating is expressed on an A to G colour coded bar chart scale, similar to those seen on cookers and fridges. The rating is based on the CO2 emissions of the building, factoring in the building’s construction fabric and heating, cooling and lighting services. A report of recommendations accompanies the certificate and sets out suggestions to improve the energy efficiency of the building in short, medium and long payback periods.
Timing
From 1 October 2008 all commercial buildings on the market for sale or let require an EPC to be in place. Newly constructed buildings require an EPC before completion can take place. There is a common misconception that an EPC is only required when the property is placed under offer. This is wrong. The Regulations require that an EPC be in place from the first day the building is marketed.
Valid period
An EPC is valid for 10 years. The certificate is available on the UK Government’s Landmark database which has full public access.
Responsibility
The legal responsibility to have an EPC lies with the organisation that has placed the building on the market e.g. landlord, company seeking an assignment or subtenant. The marketing agent also has a legal responsibility to have EPCs in place for the buildings they are advertising.
Multi-Let buildings
Clients have a choice. They can have an EPC for just the part being marketed or for the whole building. One EPC can be obtained to cover the whole of a multi-let building only if it has a common, centralised heating system.
This EPC can then be reused for the next 10 years if individual floors or suites are let or if the whole building is et or sold. If the different areas have individual heating systems then a separate EPC is required for each part being marketed.
Exempt situations
EPCs are not required for:
- Lease renewals or extensions to existing tenants.
- Compulsory Purchase Orders
- Lease surrenders
- Sales of shares in a company where the building remains in company ownership
- Exempt buildings
- EPCs are not required for:
- Places of worship
- Temporary buildings with a planned use of less than two years.
- Detached, self-contained buildings less than 50 sq m
- Industrial and agricultural buildings without any heating and where it would not be expected to be installed.
- Buildings due for demolition. Proof is required including vacant possession and intent such as a signed demolition contract or planning permission.
Non compliance
The penalty for failing to have an EPC in place whilst a building is being marketed is 12.5% of the Rateable Value, subject to a minimum of £500 and a maximum of £5,000. The Regulations are enforced by local Trading Standards officers who can request proof that an EPC is in place at any time. For completed transactions they can go back six months from the date of the deal. The penalty is repeated every 28 days if an EPC is still not prepared.