Property law specialist Alan Cook of Pinsent Masons said that there was a danger that the plans could reduce the incentives for investing in commercial property in Scotland.
The Scottish Government has launched a consultation on new regulations that would implement Section 63 of the Climate Change (Scotland) Act. (44-page / 581KB PDF) Section 63 introduces the general compulsion to improve the energy efficiency of non-domestic buildings with a floor area of more than 1000m2 that are not constructed to 2002 or later building standards.
The trigger for improvement works to take place will be when commercial property owners wish to sell the property or grant a lease to a new tenant after the regulations come in to force. When either event occurs the property owner is required to provide the incoming owner or tenant with an Action on Carbon and Energy Performance (ACEP), which comprises an Energy Performance Certificate (EPC) and an 'action plan'.
The action plan must set out how the energy performance of the building is to be improved and how greenhouse gas emissions associated with that building are to be reduced. The EPC is a document that, amongst other things, provides an indication of the energy performance of buildings.
Under the Energy Act landlords in Scotland could be prohibited from letting proprieties that have a poor EPC rating from as early as 1 April 2015, whilst such a prohibition must be brought into force in England and Wales by April 2018 at the latest.
Whilst the Scottish Government is not obliged to bring in the prohibition, property law expert Rachel Oliphant of Pinsent Masons said that the ability for it to do so "provides an incentive for the property industry to ensure that Section 63 achieves its aims to prevent more onerous legislation".
Alan Cook urged the industry to respond to the Scottish Government's consultation on the draft regulations that have been proposed to implement the Section 63 provisions.
"There has been considerable consultation on how Section 63 might be implemented, and the difficulties involved in translating the policy objectives into workable reality is borne out by the complexity of the draft regulations," Cook said. "The exemptions from the Section 63 requirements will be key, but these have not yet been fully outlined, and this will no doubt be a key focus for consultees."
What do you think? If you are property owner in Scotland have you got preperations in place to meet the new regulations?
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