September 2016 – New Regulations Non-domestic Energy Performance

Author: Mitchells Roberton
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  • The Assessment of Energy Performance of Non-domestic Buildings (Scotland) Regulations 2016 (“the Regulations”) came into force on the 1st of this month. The explanatory note published as part and parcel of the Regulations gives a flavour of their scope:

“These Regulations make provision for the assessment of the energy performance of non-domestic buildings … They also provide for the circumstances in which the owners of non-domestic buildings are required to take steps to improve the energy performance of such buildings and reduce … emissions. 

Regulation 2 sets out the non-domestic buildings and parts of such buildings to which the Regulations apply… 

Regulation 5 imposes a duty on the owner of a building to make an action plan available to prospective buyers or tenants where the building is to be sold or let… 

Local authorities have powers to enforce the Regulations. Under regulation 21 the enforcement authority may require production of an action plan. Under regulation 22 a penalty charge notice may be served on owners of buildings who contravene the requirement to make an action plan available …” 

  • In advance of the Regulations coming into force the Scottish Government published a helpful Guide on the Regulations for Building Owners: This Note picks out some of the key points from the Regulations and the Guide so as to give an indication as to who is affected by the Regulations, what action must be taken and what exemptions apply.
  • The Regulations’ requirements are additional to the need to have an Energy Performance Certificate for the building as has been a requirement since 2008.
  • Failure to comply with the Regulations could attract a penalty charge of £1,000 from the Local authority responsible for enforcement of the Regulations.

Who is affected 

  • The Regulations apply to owners of non-domestic buildings over 1,000 m² which are to be sold or leased to a new tenant.
  • The Regulations do not oblige owners to improve the energy performance of the building before it is sold or let (although this is encouraged). But, before the sale or lease of a building the owner must make an “action plan” available to prospective buyers or tenants.

Action plans

The building will have to be assessed by a registered “section 63 advisor” who will prepare an action plan for the building.

Targets are set by applying seven prescribed measures to the extent to which they are relevant to the existing building. The measures are:

  • Draught-stripping windows and doors, to reduce heat loss from unwanted ventilation;
  • Upgrading lighting controls to include occupancy or photoelectric sensors, if absent;
  • Adding central timer controls to the heating system, if absent;
  • Adding insulation to any hot-water storage cylinder present, if uninsulated;
  • Improving lighting, replacing low efficiency incandescent lamps where present;
  • Improving insulation in poorly insulated roofs, where roof space is accessible; and
  • Replacing the boiler if it is older than 15 years.

Where the section 63 advisor identifies a need for improvement measures these must be set out in an “action plan”. 

Deferring improvement measures

  • If an action plan requires measures to be taken the owner will be able to defer doing so by arranging to record and report operational energy use on an annual basis.
  • Such assessments will require to be done by registered DEC (“Display Energy Certificate”) Assessors.
  • Where an owner decides not to defer the work identified in any “action plan” the work must be done within 42 months.
  • The idea however is that any improvement measures required must (in the opinion of the “section 63 advisor”) be able to pay back the initials costs within seven years or fifteen  years (depending on the precise nature of the measures required).

Exemptions and exclusions 

The requirement to assess and improve does not apply to:

  • The building or building unit to be sold or rented is 1,000 m² or less in area;
  • certain buildings which do not require an energy performance certificate (e.g. temporary buildings with a planned time of use of two years or less and non-residential agricultural buildings with low energy demand);
  • buildings which meet the energy standard set by the 2002 or later building regulations (this standard is reported in all non-domestic EPCs produced since 20 March 2016);
  • buildings which have been improved by a UK Government “Green Deal”.

Where a building is not exempt due to any of the above and is offered for lease, there are also certain lease transactions that do not trigger the need to assess and improve:

  • renewal of an existing lease;
  • a single short-term lease of less than 16 weeks within a 12 month period.

Note: This material is for information purposes only and does not constitute any form of advice or recommendation by us. You should not rely upon it in making any decisions or taking or refraining from taking any action. If you would like us to advise you on any of the matters covered in this material, please contact Joyce Moss:

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