Energy Performance Certificates Explained
Energy Performance Certificates (EPCs) and Home Information Packs (HIPs)
You've probably arrived here after learning that you need - or will soon need - to have your home surveyed for an Energy Performance Certificate before you can legally market your home for sale to the public... but you neither know what's involved, nor what this survey will do for you.
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EPCs, HIPs and the Law!
(Updated: 20th May 2008 to reflect another Government amendment.)
Let's get some of the confusing facts out of the way:
Do I Need a Home Condition Report (HCR)?
No (but it is optional).
Do I Need a Home Information Pack (HIP)?
Yes - From December 14th 2007 all existing homes marketed for sale require a Home Information Pack.
New build
From 1st May 2008, new build homes marketed for sale require a HIP which must include a rating against the new Code for Sustainable Homes (CSH) building regulations. The HIP must include either an:
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interim certificate which reflects the expected rating against the CSH (off-plan); or a
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nil-rated certificate indicating it meets Regulation 17C of the Building Regulations 2006; or
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a star rating between 1 and 6 against the Code for Sustainable Homes.
Predicted Energy Assessment (new-build off-plan)
A HIP for a home marketed off-plan must contain a Predicted Energy Assessment (PEA). If the home is built before the home is sold, the PEA must be replaced with a full Energy Performance Certificate.
(See HIP exemptions at bottom of page)
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 a HIP and EPC?
Yes, but...
Thanks to a Govt U-turn delaying the introduction of HIPs, if you can show that both the HIP and EPC was commissioned before the marketing of your home begins, and it is presented on exchange of contracts (at the latest), then, until 31st December 2008, you are free to market your home.
Commissioned
By 'commissioned', the Government means all documents - including the EPC - within your HIP must have been ordered with a committment to pay.
There should also be an expectation that all documents will be made available within 28 days. If they are not (unlikely in most cases), the person responsible for marketing your home must make reasonable efforts to obtain them as soon as possible, or risk pain of penalty (see below).
As of 31st December 2008 a Home Information Pack - including the EPC - must be available from the time it is first placed on the market (subject to Govt review).
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 a HIP - £200 (repeatable for each day). Estate agents are automatically reported to the Office of Fair Trading (OFT) too, with continued naughtiness attracting a banning order.
How Long is an EPC Valid for?
An EPC is valid for 12 months (currently under review) - You can market your home immediately once you have commissioned a Home Information Pack with a valid EPC.
How long is a Home Information Pack (HIP) valid?
As long as the home remains unsold and continuously marketed. If you take it off the market, however, for longer than four weeks (28 days), you need another. Some documents within the HIP may also need refreshing periodically (searches, for example).
Do Houses with Less Than 3-Bedrooms Require an EPC?
Yes... from 14th December 2007 this became law.
Previously, HIPs were only required on homes having 3-bedrooms or more. Now Government is satisified there are sufficient numbers of accredited Domestic Energy Assessors to service national and regional demand, a Home Information Pack is required on all domestic properties ( see HIP exemptions at bottom of page).
4-bed homes and larger
There is a transitional period of exemption for 4-bed homes and larger that have been continuously marketed for sale since before August 1st 2007.
3-bed homes
The same applies to 3-bed homes marketed before September 10th 2007.
2-bed homes
And the same also applies to 1 and 2 bed homes marketed before December 14th 2007.
Drop Dead Date
The date when the above transitional period ends is known as the 'Drop Dead Date'. The Government has yet to set this date so if your home was marketed for sale before the applicable date (above), then you can remain HIPs-free so long as it remains on the market.
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?
- Home Information Pack Index
- Energy Performance Certificate
- 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 applies retrospectively to all HIPs, even those commissioned before 14th December.
HIP exemptions
Want to avoid the HIP? 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
- Private sale (where no marketing occured) eg: member of family
- 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
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 drawn-up, because of the Government U-turn, the "good news" is that we are currently only required to obtain a somewhat watered-down Home Information Pack... although, this is apparently, under review!
But you shouldn't dismiss a HCR entirely; the option to have one remains and it may well prove to be a well-chosen investment if it helps to shift your home quickly - it is highly considered amongst experts.
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 to most, it will be boring). Otherwise, this section is for those homeowners wanting to have it explained in terms mortals can understand.
