Scotland: The Assessment of Energy Performance of Non-domestic Buildings Regulations 2016 - Buildings on the market before 1 September 2016

Energy Alert


The Assessment of Energy Performance of Non-domestic Buildings (Scotland) Regulations 2016 come into effect on 1 September 2016. From that date, owners of pre 2002 non-domestic buildings or "building units" in Scotland with a floor area greater than 1000 m² will be obliged, on sale or lease, to prepare an "Action Plan" of measures to improve energy performance and reduce emissions of greenhouse gases. 

The Action Plan must be made available to prospective buyers or tenants. Building owners have the choice of either carrying out physical improvement measures set out in the Action Plan within 3.5 years or deferring the timetable for completing the physical improvement measures by arranging to record and report operational energy ratings (logging actual emissions and energy use via a Display Energy Certificate) on an annual basis. Local authorities will be responsible for enforcement of the Regulations, and will have power to impose a penalty charge of £1000 for failure to comply.

For a summary of the key features of the Regulations (including exemptions) please see our May 2016 bulletin.

A consultation exercise has recently been held to assist the Scottish Government in the preparation of official "FAQ guidance" on the Regulations for the property industry. According to the Scottish Property Federation, the two most commonly asked questions during the consultation related to the status under the Regulations of buildings already on the market prior to 1 September 2016, and the floor area limit as a trigger when marketing part of a building. The FAQs have now been published and deal with these two questions as follows:

Is an Action Plan required for a building which was already on the market before 1 September 2016?

The FAQs state that if a building or building unit is put on the market before 1 September 2016, and there is continuity of marketing after that date, the Regulations will not be triggered. If a building which was put on the market before 1 September is withdrawn from the market and then re-marketed on or after 1 September, the Regulations would be triggered at that point, and an Action Plan would be required. The FAQs advise that owners of buildings which are marketed prior to 1 September should keep evidence of the date the building was placed on the market (and evidence of continuity of marketing) in case of challenge by an enforcing authority

Is an Action Plan required where a building is over 1,000 m², but the part of the building being sold or leased is less than 1,000 m²?

The FAQs confirm that in this situation an Action Plan would not be required. The relevant floor area to trigger the Regulations is the area of the property for sale or rental. Where part of a building is marketed, it is the area of that part, not the area of the entire building, which is considered.

Breakfast Seminar

The coming into force of the Regulations is an important development for the property industry and we are pleased to announce that will be hosting a breakfast seminar on the topic on Friday 11 November. The seminar will look at how the Scottish approach to improving the energy efficiency of existing building stock compares to that in England and Wales, where, from 1 April 2018, a property will require to have an EPC rating of at least an "E" if the owner wishes to be able to grant a new lease (or extend or renew an existing lease) of the property lawfully. Insight into the approach being taken in England and Wales will be provided by commercial property experts from our London office. Further details of the seminar are available here.