Liverpool office

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Hill Dickinson is a limited liability partnership
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The New Energy Performanceand Empty Rating
RegimesARE YOU READY???Bill ChandlerHill
Dickinson LLP15 May 2008
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Energy Performance (1)

• 1997 Kyoto Protocol
• 2003 Energy Performance of Buildings Directive
• 2007 Energy Performance of Buildings
• (Certificates and Inspections)
• (England and Wales) Regulations

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Energy Performance (2)

• Energy Performance Certificates
• To inform prospective buyers/tenants
• Based on fabric of building as well as services
• Accompanied by recommendation report with
  payback times
• Similar to asset ratings on white goods
• - A (good) to G (bad)

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Energy Performance (3)

• Residential properties
• Compulsory element of HIPs
• Required on marketing of all residential
  properties since 14 December 2007
• Required on construction of all residential
  properties from 6 April 2008 and will be required
  on lettings from 1 October 2008
• No more than 12 months old (NB
  consultation closed 6 March 2008)

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Energy Performance (4)

• Non-residential properties
• Required on the construction (and certain
  modification), and prior to the sale or letting,
  of all non-residential properties from
• 6 April 2008 (10,000 m2)
• 1 July 2008 (2,500 m2)
• 1 October 2008
• Transitional provisions where already on the
  market on 6 April/1 July
• No more than 10 years old

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Energy Performance (5)

• Non-residential properties
• Limited exceptions
• Places of worship
• Temporary buildings (up to 2 years)
• Industrial sites, workshops and non-residential
  agricultural buildings with low energy demand
• Stand alone buildings less than 50 m2
• Building to be demolished
• Lease renewals/extensions/surrenders (?)

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Energy Performance (6)

• Non-residential properties
• No exceptions for
• Sales by liquidators/receivers/ mortgagees in
  possession
• Intra-group transactions
• Which will therefore require an EPC

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Energy Performance (7)

• Non-residential properties
• To be made available FREE OF CHARGE to
  prospective buyer/tenant
• At the earliest opportunity
• Before contracts entered into
• Before any written information made available
• Before viewing of the building

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Energy Performance (8)

• Non-residential properties
• Unless the seller/landlord believes on reasonable
  grounds that the buyer/tenant
• Cannot afford to buy/rent the building
• Is not genuinely interested
• Is not a person to whom the seller/landlord is
  likely to be prepared to sell/rent the building

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Energy Performance (9)

• Non-residential properties
• Multi-let building
• (1) selling/letting building as a whole
• can provide EPC for building as a whole (even if
  separate heating systems)

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Energy Performance (10)

• Non-residential properties
• Multi-let building
• (2) selling/letting part only common heating
  system
• can provide EPC for building as a whole
• Or can provide EPC for part being sold/let - may
  be based on a similar representative unit in the
  building

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Energy Performance (11)

• Non-residential properties
• Multi-let building
• (3) selling/letting part only separate heating
  systems
• must provide EPC for part being sold/let - may be
  based on a similar representative unit in the
  building

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Energy Performance (12)

• All properties
• EPCs to be produced by an energy assessor who
  must be a member of an accredited scheme
• Secretary of State (in reality Landmark
  Information Group Limited) to maintain register
  of
• EPCs and recommendation reports
• DECs and advisory reports

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Energy Performance (13)

• Enforcement
• Construction/modification
• Building Control
• Completion Certificate withheld
• Sale/letting
• Trading standards
• penalty charge 200 for residential
• Penalty charge 12.5 rateable value (min 500,
  max 5,000) for commercial

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Energy Performance (14)

• Display Energy Certificates
• To be displayed from 1 October 2008 in a
  prominent position clearly visible to the public
  if
• Building exceeds 1,000 m2
• And occupied by public authority (or institutions
  providing public services)
• No more than 12 months old (accompanying advisory
  report valid for 7 years)

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Energy Performance (15)

• Air conditioning systems
• To be inspected every 5 years
• First inspection by
• 4 January 2009 if 250 Kw
• 4 January 2011 if 12-250 Kw
• if system put into service before 1 January 2008

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Energy Performance (16)

• The future?
• Compulsory inspections of boilers and heating
  systems
• Factored into business rates/council tax
• Obligations to improve poor energy performance
• Ban on certain types of apparatus
• Extension of DECs to private buildings

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Business rates (1)

• Rating (Empty Properties) Act 2007
• Came into force 1 April 2008
• Stated aims
• bring empty properties to the market
• encourage redevelopment of brownfield sites

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Business rates (2)

• Commercial properties
• (other than industrial/warehouses)
• Before 1 April 2008
• 100 relief for first 3 months
• 50 relief thereafter
• Since 1 April 2008
• 100 relief for first 3 months
• Full business rates thereafter

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Business rates (3)

• Industrial and warehouse property
• Before 1 April 2008
• 100 relief indefinitely
• Since 1 April 2008
• 100 relief for first 6 months
• Full business rates thereafter

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Business rates (4)

• Charities and community amateur sports clubs
• Before 1 April 2008
• 90 relief indefinitely
• Since 1 April 2008
• 100 relief indefinitely
• Provided likely next use is for charitable/ club
  purposes

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Business rates (5)

• 3 and 6 month periods run from date property
  became empty, not from 1 April 2008
• If those periods had already expired at 1 April,
  full business rates will apply immediately
• If those periods partially expired at 1 April,
  full business rates will apply as soon as those
  periods expire

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Business rates (6)

• Any other options?
• Apply for RV to be reduced
• Application to VOA to remove from rating list if
  incapable of beneficial occupation
• No immediate plan to introduce anti-avoidance
  measures unless system is abused
• Reoccupy for 6 weeks and then claim new 3/6 month
  relief

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Business rates (7)

• DCLG has also confirmed (Dec 07)
• Empty listed buildings indefinite relief to be
  retained
• Insolvent companies exemption extended to
  properties owned by companies in administration

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Any questions?