The May 2013 edition of the Commercial Property Information Update – Issue 112 – is published today on this website.
The April 2013 edition of the Commercial Property Information Update – Issue 111 – is published today on this website.
The March 2013 edition of the Commercial Property Information Update – Issue 110 – is published today on this website.
New webinar for March: SDLT and ARPT for 2013.
Date: Tuesday 26 March 2013.
Time: 12.30pm - 2.00pm.
Venue: Your PC (wherever you like).
Speaker: Alan Riley.
Contact: Use the contact button above.
For details of online property seminars, see http://propertypsl.co.uk/online-cpd
As anticipated, The Energy Performance of Buildings (England and Wales) Regulations 2012 (“the EPB Regulations) which have been in force since 9 January 2013 have been swiftly amended.
The Building Regulations &c. (Amendment) Regulations 2013 include provisions to correct an error in the original EPB Regulations which created a requirement for an EPC on the sale or letting of the whole of a building but did not create the same requirement on the sale or letting of a “building unit” (i.e. part of a building). Now, regulation 9 of the Building Regulations &c. (Amendment) Regulations 2013 provides that, in regulation 2 of the EPB Regulations, the definition of a “building” (other than in regulations 9(4) and 11 – which already adequately deal with the differences between a building and a building unit) includes a reference to a building unit in that building.
Minor updating amendments have been made to all Property PSL leases on this website (to make reference to the new Energy Performance of Buildings (England and Wales) Regulations 2012 which are in force from 9 January 2013) and to licence for alterations (to align the drafting of clauses 7.1 and 9.4 in circumstances where the landlord's permission may cease to be of effect).
The February 2013 edition of the Commercial Property Information Update – Issue 109 – is published today on this website.
One wonders whether, when the Government published The Energy Performance of Buildings (England and Wales) Regulations 2012 which are in force from today (9 January 2013), the publishing department mistakenly put up a draft version of the regulations instead of the final version – so open to criticism is the published version.
Let us start with the most startling aspect of the 2012 Regulations: from today, the Government seems to have removed the requirement for a seller or landlord of a flat (or other part of a building, whether residential or commercial) to produce an EPC to its intending buyer or tenant. This is clearly not what was intended. Indeed the first “key point” in the Government’s guide to energy performance certificates for the construction, sale and let of dwellings states that: “A building requiring an EPC must have: a roof and walls; and use energy to condition the indoor environment. A building can be: the whole of a building; or part of a building where the part is designed or altered to be used separately.” But that is not what the new regulations say.
Under the original regulations – The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007 - an EPC was required for the sale or the whole or part of a building. This was because the statutory definition of a building stated that “a reference to a building includes a reference to a part of building which has been designed or altered to be used separately.”
Under the new regulations, “building” means a roofed construction having walls, for which energy is used to condition the indoor climate. Separately, a “building unit” is defined to mean a section, floor or apartment within a building which is designed or altered to be used separately. However, Regulation 6 of the 2012 Regulations only requires an EPC where “a building” is to be sold or rented out. The sale of a flat is clearly the sale of a “building unit” not a building. It is stretching interpretation somewhat to say that a third floor flat in a ten storey block is a “roofed construction”. The flat (the building unit) has a ceiling, but it is the building that has a roof.
There are only fleeting references to “building units” in the 2012 regulations. For example in regulation 9(4) “Certification for building units on or after 9th January 2013 may be based (a) for a non-residential building, on a common certification of the whole building for blocks with a common heating system..” But this may be construed as applying where an EPC is commissioned voluntarily. There appears to be no duty in Regulation 6 to provide such a certificate on the sale or letting of a building unit in the first place. In Regulation 11, where a building unit “having a valid energy performance certificate” (or being part of a building having a valid energy performance certificate) is offered for sale or rent, the asset rating of the building expressed in the energy performance certificate must be stated in any advertisement in commercial media. But again this may be construed as applying where an EPC is commissioned voluntarily and does not itself create a duty to obtain or provide such a certificate on the sale or letting of a building unit.
Other anomalies exist. Regulation 10 requires an existing EPC (that is, one obtained pursuant to the 2012 Regulations, not the 2007 Regulations) to be exhibited: “In a building to which this regulation applies, the energy performance certificate must be valid, and must be displayed in a prominent place clearly visible to members of the public who visit the building.” But upon whom is this obligation imposed? Regulation 10(1) says: “This regulation applies to a building…” So, will the building be hauled up in court? (Actually, the point is a non-point since, oddly, while there is a duty to exhibit under this regulation, there is no penalty for breach, and therefore no powers of enforcement. The duty could be ignored).
Display energy certificates are now required for buildings with a total useful floor area of “over 500m²” where the building is occupied by a public authority and frequently visited by the public. From 9 July 2015, DECs are also required for such buildings with a total useful floor area of between 250m² and “less than 500m²”. So, if your building is bang on the 500m² mark, you escape from the duty. A classic case of the undistributed middle.
It is probably fair to say that we should expect some amending regulations any time soon…..
The Energy Performance of Buildings (England and Wales) Regulations 2012 (SI 2012/3118) are in force from today (9 January 2013). These regulations consolidate the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007 and subsequent amendments made to those regulations since the 2007 Regulations came into force. As well as consolidating existing legislation, the new EPC regulations introduce the following changes:
- A requirement for property advertisements to include details of the energy performance certificate rating of a building where available (regulation 11);
- The removal of the requirement to attach the front page of the energy performance certificate to written material (e.g. sales particulars);
- An extension of the current requirement for a display energy certificate to be exhibited in large public buildings, to public buildings with a floor area above 500m² (regulation 14). Unlike buildings larger than 1,000m², display energy certificates for smaller public buildings will be valid for 10 years;
- A requirement for energy performance certificates to be displayed in commercial premises larger than 500m² which are “frequently visited by the public” where an EPC has been previously issued (regulation 10).
The Government’s guidance documents have been revised to reflect the changes.
This month’s CPI Update reports on the latest failed attempt to challenge the application of harsh rules relating to the exercise of tenants’ break rights - Canonical UK Ltd v TST Millbank LLC  EWHC 3710 (Ch). This case will be considered fully in Friday’s webinar: A Comprehensive Guide to Lease Break Rights - tenants' rights and landlords' rights.
In the Canonical case, as a condition of its break clause, the tenant was required to have paid rent and other sums due “up to and including” the break date, and to have paid a break premium equivalent to one month’s annual rent. In response to an invoice for payment of the full quarter’s rent and service charge due on the quarter day before the break date, the tenant paid the full amount, but later claimed that the payment was in respect of rent and service charge for the period from the quarter day to the break date, and that the excess could be treated as the one month break premium. The lease reserved the annual rent “yearly and proportionately for any part of a year”. However, the court held that the lease could not be construed as allowing an apportioned payment of rent prior to a break date. The words “proportionately for any part of a year” were taken to apply only at the start and the end of the full contractual term. On that basis, either the rent had not been fully paid by the tenant, or the break premium was not paid. In fact, the June payment by the tenant was clearly attributable to the landlord’s demand for rent and service charge and so it was the break premium that had been left unpaid.