Energy Performance Certificates Explained
From 21st May 2010, there is no requirement for a Home Information Pack (HIP) - but you do need an Energy Performance Certificate.
You've probably arrived here after learning you need - or will soon need - an Energy Performance Certificate before you can legally market your home for sale or rent to the public. This section will run you through, in simple English, what's involved, and what to watch out for.
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Energy Performance Certificates (EPCs) and the law
All this applies to residential homes in England and Wales only.
(Updated: 1st June 2010, to reflect the suspension of Home Information Packs.)
Let's get some confusing facts out of the way.
Do I need a Home Information Pack (HIP)?
No (but it is optional if you can find a supplier). From 21st May 2010 homesellers must commission an Energy Performance Certificate before marketing commences - see below for exemptions.
Do I need an Energy Performance Certificate (EPC)?
Yes - From December 14th 2007 all homes marketed for sale require an EPC (but read on...)
Can I market my home without an EPC?
Yes, but only if either yourself or your estate agent has actually ordered an Energy Performance Certificate before marketing commences.
At minimum, this means a Domestic Energy Assessor must be instructed to prepare an EPC for your home before it is marketed. The law says it must either be paid for upfront, or a clear commitment made to pay for one by the person (or estate agent) responsible for marketing (i.e., get it in writing).
There should also be a 'reasonable' expectation that the EPC will be made available within 28 days of the property first appearing on the market. This means when it is 'advertised or otherwise communicated (in whatever form and by whatever means) to the public or to a section of the public'.
If it is not (unlikely in most cases), both yourself, the seller, and the agent responsible for marketing your home must make all reasonable efforts to obtain it as soon as possible, or risk pain of penalty (see below).
EPC on private sales
As you might have guessed, even private sales to family members do not escape the duty to get an Energy Performance Certificate.
Energy Performance Certificate - new rules
This bit is important. From October 1st 2008, home-owners are now responsible for the Energy Performance Certificate. So check your estate agent doesn't trip-up and potentially land you both with a £200 fine, per instance!
An Energy Performance Certificate must be made available:
- when the property is viewed, if available;
- when written information is provided on request, if available;
- certainly before contracts are exchanged.
Sales particulars: Displaying the Energy Performance Certificate
As a minimum, the asset ratings graphs (see top picture) from your EPC must be included within the sales particulars (including electronic) if they contain two or more of the following:
- A photograph of the building or any room inside the building
- A floor plan of the building
- A description of the size of the rooms in the building.
With window cards and newspaper adverts you are not legally obliged to include the rating graphs, although the Government suggests it would be good practice to do so if they contain any two of the above items.
Enforcement penalty fine (£200)
If you - or your estate agent - is responsible for actively marketing your home, there is pain in store for not obtaining an EPC: £200 penalty fine (repeatable for each day).
The EPC, however, is the sole responsibility of the home-seller, though it would make for a daft estate agent to expose you to a penalty fine by negligently marketing your home without an EPC (because they too would kop for a fine).
Estate agents are automatically reported to the Office of Fair Trading (OFT) for continued naughtiness, leading to a banning order. But despite these risks, some agents are seemingly willing to cut corners just to have your property on their shelves, rather than competitors. Be aware.
How long is an EPC valid for?
An EPC is valid for 10 years. You can market your home immediately once you have commissioned an Energy Performance Certificate.
If you use an existing EPC nearing the end of its legal life (for example, 9 years and 11 months old), it will remain valid for as long as your home is continuously marketed. But if you temporarily pull your home off the market for more than 28 days, you will need to replace it if it's more than 10 years old when you resume marketing.
A new EPC supercedes an older one.
Want to avoid the EPC? Well, you'll need to fall into one of these categories then:
- Properties subject to a condition limiting their use to occupation for less than 11 months per year or holiday accommodation
- Mixed sales (eg. shop with flat)
- Non residential property
- Right to buy and similar properties
- Sales of property portfolios
- Properties not sold with complete vacant possession
- Unsafe properties and properties to be demolished
- Park homes
From 1st May 2008, new-build homes marketed for sale must include a rating against the new Code for Sustainable Homes (CSH) building regulations. This may be in the form of either an:
- interim certificate which reflects the expected rating against the CSH (off-plan); or a
- nil-rated certificate indicating it meets Regulation 17C of the Building Regulations 2006; or
- a star rating between 1 and 6 against the Code for Sustainable Homes.
Predicted Energy Assessment (new-build off-plan)
For a home marketed off-plan, a Predicted Energy Assessment (PEA) is required. If the home is built before the home is sold, the PEA must be replaced with a full Energy Performance Certificate by the person responsible for its construction. That person must then hand it over to the owner of the building before notifying Building Control that they have done so.
First Day Marketing
First day marketing was a temporary provision to allow homes to be marketed if both a HIP and EPC had been ordered. First day marketing ended 6th April 2009.
Find out what's involved in an energy assessment survey along with some tips to ensure it all goes smoothly!
What's in a Home Information Pack?
Note: because a HIP is now voluntary, suppliers may add or subtract from this list at will. The following is for (historical) guidance purposes only and may differ from what companies may offer today (but would form a potentially useful minimum baseline for speeding-up a transaction).
- Home Information Pack Index
- Energy Performance Certificate
- A Property Information Questionnaire, completed by the seller.
- Sale statement - Basic details showing address, whether leasehold/freehold/commonhold, vacant possession.
- Standard searches - Local land charges, water and drainage, planning decisions, road-building proposals.
- Evidence of title - Who actually owns the gaff!
- For leasehold sales - As of December 14th 2007, only the Lease is required. Additional Leashold documents can be included as "authorised" documents but are not mandatory. This law-change applied retrospectively to all HIPs, even those commissioned before 14th December 2007.
Home Condition Reports - Confusion
Part of the confusion stems from the fact that during 2006, the Government suddenly abandoned plans to require home-sellers to commission a Home Condition Report (HCR). Instead, the Govt. went ahead with just the HIP and EPC requirement (which was - and still is - a component of the HCR).
Although you are still free to have a Home Condition Report of your property drawn-up, the "good news" is, because of a Government U-turn, a HCR is now only voluntary... although this is apparently under review, over three years on!
If you really want to dig deep into the technicalities of energy performance certificates, you might find the section for Domestic Energy Assessors insightful (although I bet you won't).
Disclaimer: Believe it or not, even the Government department responsible for Home Information Packs - the Communities and Local Government - declare this in their own guides! The information on this page is given in good faith but can only be taken as an interpretation of the regulations, not a literal representation.