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The Energy Performance of Buildings Directive should have been
implemented by January 2006, but has now been deferred until 2009.
In the short term, the main effect will be a requirement for Energy
Performance Certificates to be included in HIPs from June 2007. But,
the Directive will have important consequences for the commercial
property market in general.
It is possible that energy efficient buildings will attract a premium, since
they may command a higher rent (since utility bills paid by Ts should be
cheaper). Some funders are expected to adopt a two-tiered lending
strategy whereby ‘cleaner’ buildings command more attractive terms,
and there may be concerns that some investors will find that the cost of
upgrading poorly performing buildings might be more expensive than
wholesale redevelopment. At the same time, Ts should be concerned
that Ls may want to pass on energy performance obligations to Ts in
order to preserve or enhance the energy ratings of their investment
properties. Accordingly, Ls might soon start setting energy targets for Ts
within leases.
Just how all of this will work in practice remains to be seen. What is
clear, however, is that Energy Performance Certificates will soon become
an integral part of the conveyancing process. More forward-thinking Ls will consider adopting energy policies across their portfolio (and see
whether relevant obligations can be imposed on Ts). See [2006] 179
Property Law Journal 6.
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December 2006 |
