Out-Law News 2 min. read
21 Jan 2016, 2:50 pm
An earlier draft, which would have combined the new requirements with updated EPC regulations, was consulted on by the Scottish Government in 2013 and supported in principle by consultees. However, the Scottish Government has now redrafted the proposals as a separate statutory instrument in order to "enable implementation of domestic and EU policy on emissions and energy reduction to be managed more effectively", according to an explanatory note published alongside the latest version of the regulations.
The Scottish Government had been working towards a commencement date of June 2016 for the new duty, although this has now been delayed until 1 September 2016, according to the published draft. Similar rules do not come into force in England and Wales until 1 April 2018, although these will not apply to sales.
The draft regulations have been produced under section 63 of the 2009 Climate Change (Scotland) Act, which introduced a general requirement to improve the energy efficiency of non-domestic buildings with a floor area of more than 1,000 square metres that are not constructed to 2002 building standards or later. They will require owners of those properties to "assess" their greenhouse gas emissions and energy performance, and set out the circumstances in which steps to "improve the energy performance of such buildings and reduce such emissions" will be required.
"The property industry has been awaiting these regulations for some time, following the Scottish Government's consultation on a previous draft version of the regulations in 2013," said property law expert Alan Cook of Pinsent Masons, the law firm behind Out-Law.com.
"There are a few questions over details in the draft, and we now await the publication of guidance notes to accompany the regulations which will hopefully clarify the approach in a number of respects. Property owners will now need to take account of the requirements for energy efficiency measures when they sell or lease their properties in Scotland from 1 September 2016, and it remains to be seen what impact this will have on the market for older, less energy efficient premises," he said.
Once in force, the new regulations will be triggered once a commercial property owner wishes to sell the property or grant a lease to a new tenant. They will not apply on renewal of an existing lease or to short-term lets as defined by the regulations. When either event occurs, the property owner will be required to provide the incoming owner or tenant with an Action on Carbon and Energy Performance (ACEP), made up of an EPC and an 'action plan'.
The action plan must set out the improvement works required to bring the energy performance of the building and its associated greenhouse gas emissions in line with the required standards. Only those works which the party who prepared the action plan, the section 63 advisor, recommends be carried out will have to be completed. Improvement measures which may be identified in the action plan are specified in the regulations. These are installing draught stripping to doors and windows, upgrading heating or lighting controls, upgrading low energy lighting, replacing a boiler and insulating an accessible roof space or hot water tank where these meet certain energy improvement criteria and they are identified by the section 63 advisor as measures which it would be “practicable” to carry out.
Once an action plan is agreed, the owner will have up to 42 months to carry out any recommended building improvements. This period has been chosen as the current duration of a building warrant plus six months planning time. The owner may also choose to defer the works, in which case it will instead have to record and report on the building's actual energy consumption and emissions throughout the deferral period.