Which properties are EPC exempt? Buildings that don't need one

If you've had even the slightest dealings with buying, selling or letting properties, you'll more than likely have come across an EPC - or Energy Performance Certificate - during the process.

If you're not entirely sure what an EPC is, it's a document that gives an idea of how energy efficient a building is. The EPC compares how much energy is produced against how much is wasted unnecessarily. Each building is assigned a rating from A to G, where A is the (rarely achieved) highest grade, and G is the poorest. Therefore, the EPC gives an idea on how costly it might be to heat and light the building, as well as what the carbon dioxide emissions are likely to be.

When you come to sell your property, you will need an EPC rating for prospective buyers to review. For landlords and tenants, rental properties must have a rating of E or above to meet with regulations, unless they have a registered exemption. You will need an EPC to prove that your rental property meets the Minimum Energy Efficiency standards.

The majority of buildings that come up for sale or rent in the UK are legally required to have an EPC, however, there are a few exceptions.

What is an EPC exemption?

Some buildings are exempt from the usual EPC requirements, meaning the usual energy efficiency rules don't apply to them. This could be due to the age, use, or status of the building.

There are also specific exemptions which apply to rental properties.

If you are a landlord, the rules around energy performance are very strict, because all rental properties must meet the Minimim Energy Efficiency Standards (MEES). If your property cannot meet the minimum EPC rating of E because of one of a set number of reasons, then this exemption must be registered.

Those reasons include high cost exemption (where improvements would cost more than £3,500), all improvements made (where all recommended improvements have been carried out, but the property still cannot achieve an E rating), consent exemption (where permission to make improvements is needed from local authorities, mortgage lenders or current tenants, but has been declined), wall insulation exemption (where recommended wall insulation improvements would damage the property), devaluation exemption (where EPC recommendations would cause the value of your property to reduce by more than 5%), or new landlord exemption (where you have become a landlord through inheritance or by buying a property with an existing tenant, which allows you six months to meet the minimum energy performance requirements or register a different exemption).

Let's have a look at which buildings might be exempt from an EPC.

Which buildings are exempt from an EPC?

If a building has a roof and walls and uses energy to condition the indoor climate, then more often than not it will require an EPC. However, there are some exceptions to this:

Holiday lets

Properties that are used for short holiday accommodation rentals, or that are rented out for less than four months of the year, may not need an EPC. It's worth noting that the total time the property is rented out must add up to under four months out of the year all together - not less than four months per rental.

Small standalone buildings, e.g. workshops

Standalone buildings with a total useful floor area of less than 50 square metres - which could include garages, workshops and other outbuildings - are exempt from standard EPC requirements. The exception to this is if they are used for commercial purposes (such as a car repair shop or public garage), when they may require an EPC.

Industrial sites and agricultural buildings

Buildings that use less than 25% of their energy for heating the spaces where people work may not require an EPC. This means that industrial sites including warehouses, factory or farm buildings that use very little energy for heating or lighting do not always need an EPC, including buildings with no heating at all.

Listed buildings

Grade I and grade II listed buildings can sometimes be exempt from needing an EPC, but the specific rules can be a little complicated. Being listed doesn't mean an automatic exemption, but if the energy efficiency improvements needed would alter the building's character to an unacceptable level, then an exemption may apply. Your local authority conservation officer will be able to advise you on whether or not a particular listed building will need an EPC.

Temporary buildings

Temporary buildings that will be used for less than two years don't need an EPC. Examples might be temporary offices or buildings designed to provide short-term accommodation.

Vacant buildings that are due for demolition

Derelict or vacant buildings that are sold or rented with the intention of demolition do not always require an EPC. However, if the property is derelict but is not sold with the intention being to demolish it, then an EPC is usually still needed.

Places of worship

Religious buildings which are mainly used for worship - which could include churches, mosques and temples - don't require an EPC.

Some common building types that might raise questions over whether or not they are exempt from needing an EPC are new builds and annexes.

Any dwelling created after 1st April 2008 must have an EPC certificate created via full SAP methodology. The difference with some new builds - and where people are likely to get confused - is that they do not require a site visit in order to produce the EPC. Rather, the EPC is created from plans and specifications provided by the architect or builder during the building process.

Annexes can be a little more complicated. If the annexe is considered a self-contained dwelling - meaning it has its own entrance, cooking and bathing facilities, then it is likely to need its own EPC. However, if the annexe shares heating and facilities with the main house, then it may be included with the EPC for the rest of the property.

How do I know if my property is EPC exempt?

If your property falls into one of the categories above, then there's a chance it may be exempt from needing an EPC. Most homes and residential buildings will need an EPC, unless they are listed buildings or rented out as short term holiday lets for less than one third of the year.

How to check if a property is EPC exempt

The best place to start is by taking a look at the gov.uk website, where you'll find information and guidance on which buildings are exempt from an EPC.

You can also speak to your local authority's building control department, or even local estate agents, as they will be more familiar with the properties where you live. Or have a chat with the friendly team at Lease Planners - we are always happy to help when it comes to understanding any part of the property process.

How to register your EPC exemption

Most of the time, if your property does not require an EPC, you will need to register your EPC exemption. This is particularly relevant if you are a landlord planning on renting out the property, because there are strict rules which you must comply with in order to meet the Minimum Energy Efficiency Standards. Registering provides legal protection for you as a landlord when you rent out a property that does not meet these standards.

Gather evidence

In order to register your exemption, you will need to collect a variety of evidence to prove your property is exempt. The specific evidence you will need will vary depending on your property type.

Register on the PRS Exemptions Register

Next, you will need to visit the PRS Exemptions Register and provide the necessary documentation to support your exemption.

If this has all left you scratching you head, then don't worry - at Lease Planners we have many years of experience with EPCs and are always happy to offer advice in this sometimes confusing area.

Find out more about our EPC services and how we can help with the process on our website, or give us a call and see what we can do for you.