Energy Performance Certificates (EPC)

On 1 October 2008, anyone wishing to sell a business in the UK will have to provide an Energy Performance Certificate (EPC) prior to an exchange of contracts.

Although this does not need to be provided until the exchange of contracts we recommend that the EPC should be commissioned as soon as the business is placed on the market.

The reason being that it reduces the possibility of the sale collapsing due to a poor rating, or the buyer wanting to renegotiate the deal.

If the premises is let on a leasehold basis either the freeholder or leasehold would have to provide this report dependant on who sold first.

This will add £500 plus on to the cost of selling a business in the short term but the good news is that the EPC will last for 10 years. What this will mean is that anyone selling that same business within that period will not have that cost.

The idea is that the buyer can see how efficient the premises is and what their likely energy bills will be. The idea is that the higher the rating the more the premises is worth.

In the UK residential property has been required to provide an EPC, and surveys have indicated that buyers would be willing to pay £3 - £4,000 more for a property with a good rating.

It may however be worthwhile, if your energy bills are high in getting an EPC assessment from an assessor as it would reduce your energy bills and increase your profits. For most small businesses a £1 deduction in their costs increases the value of the business by at least £2. So this investment should be recouped many times over.

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This entry was posted on 16/09/2008 at 12:04 pm and is filed under Buyers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.