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New regulations for commercial buildings: what are your obligations

Owners of large non-domestic buildings should be aware of the Assessment of Energy Performance of Non-domestic Buildings (Scotland) Regulations 2016, which come into force on 1 September 2016.

These new regulations apply to certain types of commercial buildings and obligate owners to take action to assess and improve the carbon and energy performance of their property. Such requirements are additional to Energy Performance Certificate (EPC) needed for non-domestic buildings.

The regulations are important as any qualifying buildings will be subject to new obligations upon the sale of the building or lease to a new tenant. Additionally, non-compliance could lead to a costly financial penalty, which the owners will have to pay.

Does your building qualify?

A building, or unit within a building, will be subject to assessment under the regulations if all of the following applies:

  • it is being sold or rented to a new tenant;
  • it has a floor area of more than 1,000 m²; 
  • it is not EPC exempt under regulation 4(a) of the Energy Performance of Buildings (Scotland) Regulations 2008;
  • it was constructed in accordance with a building warrant applied for prior to 4 March 2002;
  • it does not meet or exceed the energy standards applicable on 4 March 2002; and
  • it is not a Green Deal improved property.

What action must you take?

Make an action plan

If a building or unit qualifies and is to be sold or let, the owner must produce an action plan, free of charge, for inspection by any prospective purchaser or tenant (much like an EPC). A prudent owner will have an action plan prepared well in advance of any sale or lease. This is especially important as the exhibition of this action plan will be a condition of any sale contract or missives of let.

What is an action plan?

An action plan is a certificate containing measures that:

  • improve the energy performance of the property; and 
  • reduce emissions of greenhouse gases produced by or otherwise associated with that building or building unit.

Such measures will be in the form of physical enhancements that should be made to the building or unit within a certain timescale.

An action plan must be prepared and issued under the regulations by a Section 63 Advisor. It is their role to:

  • calculate the energy performance targets and the emissions target for the building or unit using approved software and methodology. This will be based on the valid EPC for that building or unit;
  • recommend specific building improvement measures to be carried out by the owner in respect of the building or unit; and 
  • liaise with the owner to decide on a suitable timescale for the implementation of these building improvement measures.

The improvement measures that can be recommended by a Section 63 Advisor are:

  • installing draught stripping to doors and windows;
  • upgrading lighting controls;
  • upgrading heating controls;
  • installing an insulation jacket to a hot water tank;
  • upgrading low energy lighting;
  • installation of insulation in an accessible roof space; and
  • replacement of a boiler.

Alternatively, a Section 63 Advisor can recommend that an owner should report their annual operational energy.

Once finalised, all of this information will be recorded on the action plan document and uploaded to the Scottish EPC Register.

Implementation of building improvement measures

The owner will have until the end of a compliance period specified in the action plan to make the necessary improvements to the building or unit. 

Once the improvements have been made to the property, the owner must ensure that an energy performance certificate for that building or building unit is issued on or after the date of completion of the building improvement measures. They also need to ensure that a 'document of confirmation of improvement' is issued.

Enforcement

Enforcement Authorities

It is the duty of each local authority to enforce the regulations in its area.

Penalty Charge Notices

Local authorities can issue a penalty charge notice of £1,000 to the owners of buildings who contravene the requirement to:

  • make an action plan available; or
  • implement building improvement measures in an action plan. 

It is, therefore, essential that owners are mindful of their new obligations come 1 September 2016 and take the required actions to avoid unnecessary financial penalties.

Further information on the regulations, the assessment process and how to undertake it are published on the Scottish Government website.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at July 2016. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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