Energy Performance Legislation Change in Scotland

9th September 2016

Commercial property owners in Scotland need to be aware of new energy performance legislation that has just come in to force, and the cost implications it could have for property they plan to sell or lease.

New legislation under Section 63 of the Climate Change (Scotland) Act 2009 became law on 1 September 2016. This affects non-domestic buildings, or units within buildings, with a conditioned floor area over 1,000 sq. m. These buildings must undergo an assessment of carbon and energy performance, the outcome of which will be a three part report comprising; an Energy Performance Certificate (EPC), a Recommendations Report and an Action Plan for the building outlining targets and proposed improvements.

The existing EPC regime rated the energy efficiency of a building using a scale from A to G (with A the most energy efficient). In Scotland practically all commercial property sold or leased had to have a valid EPC, prepared by a suitably qualified and accredited assessor, prior to the property being marketed.

This new assessment will be carried out in a similar way to the existing EPC regime and by accredited professionals, however now the recommendations have become mandatory.

The triggers for the requirement to undertake the new assessment are the sale of a property or rental of a property to a new tenant. Lease renewal to an existing tenant will not be a trigger for assessment.

The Recommendations Report will detail physical measures which can be taken to improve the energy efficiency of the building. It will also detail the operational ratings on energy performance and carbon emissions which are to be recorded and presented annually.

The Action Plan details the timescale for implementing the Recommendations Report. The building owner then has two options. They can either carry out the improvement works within the specified timetable of three and a half years, or defer and implement a policy of monitoring, recording and reporting the operational ratings of the building within one year.

If the building owner decides to defer the work they will have to record actual metered energy use annually and display a DEC (Display Energy Certificate). This is similar to an EPC but shows actual energy consumption rather than a notional energy performance rating. They will also have to report actual metered energy use annually to the Scottish EPC Register.

I strongly advise commercial property owners to make themselves aware of this new change in legislation. Local authorities can take measures to enforce the legislation and it is solely the property owner who is liable for compliance. The Scottish government will be monitoring the collection of energy performance data and may act to make retrofit works compulsory if there are no reductions in energy consumption or greenhouse gas emissions.

Ken Macpherson

Ken is a Partner leading Ryden’s Building Consultancy Group in Aberdeen dealing with Building Surveys, Dilapidations advice to Landlords / Tenants, Project Monitoring advice to Funders / Occupiers, Contract Administration, Project Management, Planned Maintenance Schedules, Asbestos Surveys and provision of general commercial property related consultancy.

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