An Energy Performance Certificate, or EPC, is an important document showing the energy efficiency of your domestic or commercial property. Most properties in the UK need an EPC, before they’re rented or sold. But did you know that some properties don’t need one?
Exemptions from EPC requirements mean the usual energy efficiency rules don’t apply to these properties. The possibility of EPC exemptions for commercial properties in the UK depends on the property’s age, use, or status. There are specific EPC exemptions that only apply to rental properties.
In this guide, we’ll help you understand which properties face exemptions from EPC requirements.
EPC Exemptions for Commercial Properties
The following common EPC exemptions apply to commercial properties.
Listed Buildings
Grade 1 and Grade 2 listed buildings can be EPC exempt, but a listed building doesn’t automatically receive an exemption. It’s applicable only if the energy efficiency improvements possibly alter the building’s character to an unacceptable level.
Industrial Sites and Non-Residential Agricultural Buildings
If your building uses less than 25% of energy for heating, then your commercial space can be EPC exempt. Non-domestic farm buildings and industrial sites, including warehouses and factories that depend on very little energy for heating and lighting, may not require an EPC, including buildings with no heating at all.
Temporary Buildings
Buildings that are only intended to be used for a year or two don’t need an EPC. Examples include temporary office buildings or buildings that provide accommodation for a short time.
Small Standalone Buildings
Standalone buildings are completely free-standing structures. Small standalone buildings, like workshops, garages, and other outbuildings with a total useful floor area of less than 50 square metres, are eligible for exemptions from EPC requirements. But these buildings will still need an EPC if they’re used for commercial purposes, such as car repair shops or public garages.
Buildings Due for Demolition
Vacant or derelict buildings sold or rented with the intention to be demolished don’t always need an EPC. An EPC is still needed if the building is derelict, but is not intended to be demolished.
Holiday Rentals
EPC exemptions for commercial properties apply if they’re used for short holiday accommodations or rented out for less than four months in a year. The total time the property is rented must be within four months out of the year, and not less than four months per rental.
Places of Worship
Churches, temples, mosques, and other religious buildings, which are primarily used for worship, are eligible for exemptions from EPC requirements.
Specific Exemptions for Rental Properties
The introduction of Minimum Energy Efficiency Standards (MEES) has made the rules around EPCs stricter for rental property owners. Effective from April 2020, all rental properties need to be at least at EPC band E, unless they have a registered exemption.
If a property can’t meet the minimum E requirement, landlords can register under the following EPC exemptions:
High Cost Exemption
You can register for this exemption if improvements to your property are slated to cost more than £3,500 (including VAT). This EPC exemption is for residential properties and will come into effect only after proving that the cheapest recommended improvement exceeds this amount. This exemption lasts for five years.
All Improvements Made
You’re eligible for this exemption if you’ve made all possible improvements, even exceeding the cost cap of £3,500, but your property still doesn’t reach the recommended E rating. You need to provide evidence of the improvements made and show reports that no further improvements are possible. This exemption also lasts for five years.
Wall Insulation Exemption
If a qualified expert (RICS chartered surveyor) confirms that implementing cavity wall insulation, external wall insulation, or internal wall insulation would damage your property, you can register for the wall insulation exemption. This exemption is valid for five years.
Consent Exemption
Making improvements may require consent, like planning permission from local authorities, consent from mortgage lenders, or agreement from tenants. You can register for the consent exemption if permission was denied or was granted with conditions you couldn’t reasonably meet. If this exemption is related to tenant-related consent issues, it only lasts until the tenant leaves.
Devaluation Exemption
If making energy-efficient improvements will reduce your property’s market value by 5%, you can apply for this exemption. You can prove your claim with a report from an independent RICS surveyor. However, you still need to make other improvements that don’t devalue your property.
New Landlord Exemption
If you’ve recently become a landlord under special circumstances, such as buying a property with an existing tenant or inheriting a rental property, you are temporarily exempt. You’ll get six months to bring your property up to standard or register for another exemption category.
How Do I Know If My Property Is Exempt?
If your property falls into any of the above categories, there’s a good chance that it’s exempt from fulfilling EPC requirements. But the best place to start is by visiting the gov.uk website for complete information and guidance on exemptions from EPC requirements for your property.
Most homes and residential properties will need an EPC. If you need help improving your property’s EPC rating, reach out to us at Gio Property Solutions, and we’ll be happy to help.
What Is an EPC Exemptions Register?
An EPC exemptions register is a database of properties exempt from EPC requirements.
If your property is exempt from an EPC, you need to register the exemption, especially if you’re a landlord. Registering provides you with legal protection if you’re renting out a property that isn’t MEES-compliant.
The process begins with gathering information to support your exemption claim, then registering on the EPC exemptions register. It’s important to keep a record of this exemption registration for future use.
How Gio Property Solutions Can Guide You
Even if your property is exempt, having an EPC can be useful. You can understand your domestic or commercial property’s energy efficiency needs and make the recommended improvements to save money on your energy bills.
With the proposed changes to EPC requirements for rental spaces to C, landlords with a current rating of D or below need to rethink how to improve their energy efficiency over time. We can help you understand your property’s potential for improvement and plan to spread expenses and work over a longer period. Speaking with a professional like Mark from Gio can help you get to grips with the exact requirements for your property and understand whether or not it can be exempt.
Contact us today on 07510 060 669 or email us at mark@giopropertysolutions.co.uk.
