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Commercial Property News
EPC's will hit commercial property sales from next week
Many commercial property transactions which have been delayed by financing difficulties and are still in the pipeline months after they should have completed may fall foul of the introduction of mandatory energy performance certificates (EPCs) for commercial buildings next week, which will be a fresh blow to the depressed property market, a leading law firm has said.
From 1 October, all commercial buildings marketed for sale or letting will need an EPC, grading their energy efficiency. The estimated cost of a certificate ranges from £1,500 for a small shop to £50,000 for a shopping centre.
Catherine Diggle, partner at law firm LG, said: “The commercial property market is already depressed and the need to produce EPCs will be seen as an unwelcome and potentially significant extra cost at an already very difficult time.”
Diggle also criticised the government for failing to clarify its position on “not-for-value transactions” - certain deals that may be exempted from the EPC rule.
“The commercial property market is already depressed and the need to produce EPCs will be seen as an unwelcome and potentially significant extra cost at an already very difficult time”
She said: “There is an exception for 'not-for-value transactions' dependant on the individual circumstances, but it is not clear what this actually means as clarification is awaited from the DCLG.
“It may not extend to the sale of properties by insolvent companies at a nil price, which will cause difficulties for administrators and receivers, particularly as the costs could be significant and cannot be recovered from the buyer.”
Diggle said it would be “risky” to assume that transfers of commercial properties where no money changes hands are not required to get EPCs.
From 1 October, all commercial buildings marketed for sale or letting will need an EPC, grading their energy efficiency. The estimated cost of a certificate ranges from £1,500 for a small shop to £50,000 for a shopping centre.
Catherine Diggle, partner at law firm LG, said: “The commercial property market is already depressed and the need to produce EPCs will be seen as an unwelcome and potentially significant extra cost at an already very difficult time.”
Diggle also criticised the government for failing to clarify its position on “not-for-value transactions” - certain deals that may be exempted from the EPC rule.
“The commercial property market is already depressed and the need to produce EPCs will be seen as an unwelcome and potentially significant extra cost at an already very difficult time”
She said: “There is an exception for 'not-for-value transactions' dependant on the individual circumstances, but it is not clear what this actually means as clarification is awaited from the DCLG.
“It may not extend to the sale of properties by insolvent companies at a nil price, which will cause difficulties for administrators and receivers, particularly as the costs could be significant and cannot be recovered from the buyer.”
Diggle said it would be “risky” to assume that transfers of commercial properties where no money changes hands are not required to get EPCs.
Thu, 25th Sep 2008