S63/SEEP has arrived
Vicky Cotton, Environmental Director at Workman, provides her take on S63 (SEEP), MEES and the changes to EPC minimum standards.
S63 (SEEP) AND MEES – WAS CRC THE CATALYST?
In 2010 the Carbon Reduction Commitment (CRC) hit the media headlines and for owners and investors the sustainability credentials and energy performance of properties became a key issue. Without CRC, it could be argued, this wouldn’t have happened for the majority of owners and investors.
Love it or loathe it, it seems CRC was the catalyst for driving sustainability and environmental performance up the boardroom agenda and environmental management is now embedded in property management.
The next big thing
MEES and S63 (SEEP) are undoubtedly ‘the next big thing’ in the drive for energy reduction. The impact of the legislation is already significant, particularly MEES; which is a bit more established albeit not actually a requirement until 2018.
While there was significant debate about whether an EPC is the right tool (I and many others feel that a DEC would have been better given that it looks at a building in use rather than a point in time) it is the tool we have. And if we have the wrong EPC rating (and F or a G), the property or unit is all of a sudden a huge risk in the portfolio – a property which can’t be let is no use to anyone.
With 18 months to go, the clock really is ticking on MEES but there is still time to do what is required. S63 (SEEP) on the other hand…
1 September 2016 – It’s not a typo
S63 (SEEP) has been a very quick and steep learning curve. I repeatedly tell people it is not a typo – it really did start on 1 Sept 2016. It’s here and we need to be meeting the legislation now.
The practicalities are still, to some extent, a little unclear. We know we need an action plan prepared at the point that a property of more than 1,000 sq m is brought to the market, to bring it up to 2002 Building Regulations (if it already meets them, it is exempt). If the property was put on the market before 1 September 2016 (and stayed on the market) it is also exempt – it is only those brought to it afterwards.
In my view, the speed of bringing in this legislation and the lack of guidance raises questions on the practicalities. As with MEES, the relationship between landlord and tenants and how matters will be dealt with between them is not mentioned. It appears there is the ‘usual’ assumption that issues will be discussed amicably and all parties will agree on responsibilities, timings and access arrangements. There is also a big question mark on the ability to obtain a DEC instead of doing the works set out in the action plan to bring properties up to the 2002 Building Regulation standards.
Can we get away with getting DEC indefinitely (ie. annually) rather than actually improve stock?
There is a big question mark on the ability to obtain a DEC (Display Energy Certificate) instead of doing the works set out in the action plan to bring properties up to the 2002 Building Regulation standards.
It could be argued that there is no cost saving in doing this but as things stand it looks to be a possibility and in some cases means nothing need be done to improve the property.
The action plan is also potentially obtained by the seller and passed straight over to a new purchaser – will they care about the quality of what they are instructing and will the outcome of that action plan have an effect on the sale process if the works are onerous?
What are the options?
We are now working with clients on a number of S63 (SEEP) action plans and need to see how this all plays out over the next few months. It certainly has it benefits – F and G legislation would not have worked in Scotland and this should give clear guidance on exactly what is required to lift stock from a list of seven options.
If you’d like to discuss your options on individual assets and portfolios please do get in touch, I’ll be happy to help.