Introduction
When selling a commercial property, an Energy Performance Certificate (EPC) provides important information about the energy efficiency of the building and its likely running costs. EPC compliance is not only a legal requirement in most cases, but it is also increasingly relevant to buyers, investors and lenders who are assessing long-term operating costs and regulatory risk.
Understanding EPC requirements — and addressing any potential compliance issues before marketing — can improve buyer confidence and reduce delays during the transaction process.
Energy Performance Certificates and Ratings
An EPC measures the energy performance of a building and provides a rating from A (most efficient) to G (least efficient). The certificate also includes recommendations for improving energy efficiency and reducing energy consumption.
In most circumstances, it is a legal requirement for the seller to provide a valid commercial EPC before marketing a property for sale or letting. A copy of the EPC must be made available to prospective purchasers or tenants at the earliest opportunity.
Commercial EPCs are typically valid for 10 years from the date of issue, although a new certificate may be required if significant building alterations or improvements have taken place.
Minimum Energy Efficiency Standards (MEES) — Important for sellers
Energy performance is now more than an informational requirement. The UK’s Minimum Energy Efficiency Standards (MEES) regulations mean that buildings with very poor energy ratings may face legal restrictions.
Currently, most commercial properties must achieve a minimum rating of E or above to be legally let in England and Wales, subject to certain exemptions. Future government targets are expected to tighten minimum standards over time, with a proposed pathway towards higher ratings by the end of the decade.
This creates potential risk for buyers acquiring poorly performing buildings, particularly investment properties. As a result, EPC ratings can directly influence property value and marketability.
Sellers should therefore consider whether their building’s rating could affect buyer demand before marketing begins.
When an EPC may not be required
Certain types of buildings may be exempt from EPC requirements, including:
- Buildings with a total useful floor area under 50 square metres (subject to conditions)
- Agricultural buildings with low energy demand
- Temporary buildings intended for use for less than two years
- Places of worship
- Buildings due to be demolished (subject to specific criteria)
Professional advice should be obtained where there is any uncertainty regarding exemption status.
How EPC ratings affect commercial property sales
A stronger EPC rating can make a commercial property more attractive to buyers by:
- Demonstrating lower running costs
- Reducing future compliance risk
- Supporting environmental and sustainability targets
- Improving lender and investor confidence
Conversely, properties with poor ratings may require capital expenditure to improve energy efficiency, which buyers may reflect in their pricing.
Improving your EPC rating before a sale
In some cases, improving an EPC rating before marketing may be worthwhile, particularly if relatively straightforward improvements are available. Potential measures can include:
- Upgrading lighting systems to energy-efficient alternatives
- Improving insulation or glazing
- Updating heating or cooling systems
- Installing modern controls or smart energy management systems
- Removing inefficient temporary heating equipment prior to assessment
The suitability and cost-effectiveness of improvements will depend on the building type, age and configuration.
Commissioning a commercial EPC
A commercial EPC must be prepared by an accredited non-domestic energy assessor. The process typically involves a site inspection where the assessor records information relating to:
- Construction materials and insulation
- Building dimensions and layout
- Heating, ventilation and air conditioning systems
- Lighting installations
- Glazing and building fabric
- Usage of internal spaces
Unlike domestic properties, commercial buildings can vary significantly in size and complexity, which means obtaining an EPC may take longer and involve higher costs. It is advisable to arrange the assessment early in the sales process to avoid delays when marketing begins.
Providing EPC information to buyers
A copy of the EPC should be included within the marketing material and legal documentation where possible. Buyers may also request:
- Recommendation reports
- Evidence of energy improvement works
- Compliance with MEES regulations (if applicable)
- Details of energy systems or upgrades
Providing this information early can reduce legal enquiries and support a smoother transaction.
Professional Advice and Compliance Considerations
Energy efficiency regulation continues to evolve, and compliance requirements may change over time. Sellers should consider seeking advice from energy consultants or building professionals where:
- The EPC rating is low
- Improvements may be required
- The building is complex or specialist
- There is uncertainty about regulatory compliance
Early advice can help identify risks and opportunities before marketing the property.
Summary
Providing a valid commercial EPC is a legal requirement in most cases and an important factor for buyers assessing operating costs and regulatory risk. Stronger EPC ratings can enhance marketability, while poor ratings may affect value and buyer interest. Arranging an EPC early and understanding any improvement requirements can help avoid delays and support a successful commercial property sale.
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