We are talking about the fixed 10 year validity period for an EPC. It is a problem, but the problem is NOT that it is 10 years. The problem IS that it is a fixed validity period.

Let’s look what an EPC is. It is a legal document that states the energy efficiency of the building. The EPC rating is in energy efficiency terms referred to as the “asset value”. There is now a significantly increased focus on achieving minimum energy efficiency standards. Increasingly lenders are only lending if the EPC rating is high enough, or are offering rates depending on how high the rating is. The EPC rating definitely now impacts on the value of the property so has truly become part of defining the asset value.

The EPC is a statement for a prospective buyer or tenant of how energy efficient the building is, so they can consider how much it is worth to them. To knowingly provide a prospective buyer or tenant with an incorrect statement about something that affects a property’s value would be deceitful.

There are protections against property misdescription in all aspects of the property selling or renting process, except for where the EPC is concerned. An EPC can be used provided it is no more than 10 years old (which is not a problem), irrespective of whether or not the building still matches the EPC (AND THIS IS THE PROBLEM).

The EPC consultation is an opportunity to fix this problem, but we cannot over stress the fact that changing the fixed validity period of an EPC does not fix the problem. All it does is partially reduce the effects of the problem. Not addressing the fact that once a property is altered an EPC is no longer true would be inexcusable. Simply shortening the fixed validity period of the EPC does not do that.

What the regulations need to say is that an EPC is valid for up to a maximum of 10 years (arguably still reasonable), provided it has not been superseded by a newer one, and provided the energy efficiency characteristics of the building have not been altered since the date of the assessment.

Making this simple change to the regulations fixes the main cause of the problem. For domestic properties it is pretty straightforward. There is a list of energy efficiency related characteristics of the building shown on the domestic EPC. If any of those is no longer correct because the property has been altered, the EPC is no longer valid. That does not mean a new EPC is required as soon as an alteration is made; it does mean that when an EPC is next required, the existing one cannot be used and a new one must be obtained. The maximum validity for an EPC ceases to be a loophole that allows a property to be misdescribed.

(We would exclude a change to the proportion of energy efficient lighting from the alterations that invalidate an EPC. That is arguably an occupier related variable rather than an inherent characteristic of the building).

On the subject of maximum validity for an EPC, it would be inappropriate to ignore what (hopefully) is coming next. The current delayed release of RdSAP10 (domestic EPC software) is only a stop-gap. Already under development is its successor, the Home Energy Model (HEM). That will be based on a totally different calculation engine. One that can be sat behind the EPC register. At any point it should be possible to open up the EPC and see what the costs and paybacks would be based on current prices. This largely eliminates the problem of the EPC becoming out of date (unless the property is altered).

This means that shortening the life of EPCs is a long term fix for a short term problem. It is hard to justify retrospectively shortening the life of existing EPCs. Government telling people that the thing they bought with a 10 year validity is now only valid for a shorter time would be a political and legal minefield. All they could do would be to shorten the life of new ones produced now. By the time any of them are due to expire, the HEM should be well established and the need for a shorter validity period will have long gone. This would be a classic case of shutting the stable door after the horse has already bolted.

It is not quite as simple for non-domestic properties as the EPC does not provide an equivalent list of energy efficiency related characteristics. The solution here though is to upgrade the non-domestic EPC to something with more features, more equivalent to the domestic software. Again, the validity of the EPC is NOT the problem, in this instance the software IS.