What is an Failed EPC?
Energy Performance Certificates were introduced in England and Wales in 2007 and are a legal requirement followed by the Minimum Energy Efficiency Standards (MEES)in 2018.
Essentially this is where any rented property needs to meet a minimum grade of an E, Property that is to be sold, does not need to meet this standard currently.
The EPC is graded at A – G (High – Low) via a graph format for ease of understanding.
What are the consequences of an Failed EPC?
The Consequences can be quiete harsh if you are found to have rented out a property with a failed EPC or even without a valid EPC. The MEES Regulations will be enforced by Local Weights and Measures Authorities (LWMAs). LWMAs will have powers to impose civil penalties which are set by reference to the property's rateable value.
The penalty for renting out a property for a period of fewer than three calendar months in breach of the MEES legislation will be equivalent to 10% of the property’s rateable value, subject to a minimum penalty of £5,000 and a maximum of £50,000. After three months, the penalty significantly rises to 20% of the rateable value, with a minimum penalty of £10,000 and a maximum of £150,000.
What effects a Failed EPC has
MEES Legislation legally at this moment in time only covers Rented/ Leased properties basically stating that if the Grade is below an E grade, the property CAN NOT be let/ rented out until it has been improved, however through our extensive experience in this field, lenders for people looking to purchase a property see properties with a failed EPC attached as a toxic debt and as such will not lend against it until they are satisifed it can be bought up to standard.
What is the Average EPC Grade for properties?
In our extensive experience of over 6000 EPC’s the average EPC grade is between a D and E grade.
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Are there any exemptions to having a failed EPC
MEES Legislation has been worked of the Green Deal when that was in exsistance and as such uses the the Golden 7 year pay back rule.
If a property can not be bought up to standard within a 7 year Green Deal payback period then the Building or part of building can be put on the Building exemption register.
Where a recommended measure is not a “relevant energy efficiency improvement” because the cost of purchasing and installing it does not meet the 7 Year Payback test (Regulation 28(3)).
Applies only to non-domestic property.
How Can BEST Compliance Help
BEST Compliancer will firstly undertake a review of the failed EPC to ensure it is correct and indeed current. We have had many occasions when the EPC has been incorrectly lodged by a less qualified assessor where they have either missed something or used default values if they could not ascertain certain information about the building.
Second stage would be to undertake a multi strategy approach to see how to get the building to a minimum of an D grade and publish it in an easy to understand report format.
Third stage would be to cost out the recommended staregy using BCIS pricing guides and to work out if it falls within th 7 year payback period.
If the building still doesnt fall into the 7 Year pay back the building can be placed on the exemption register for a period of 5 years.