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Building Relationships

DEC roll-out: are your bills on the record?

The Government has announced new plans to make Display Energy Certificates (DECs) compulsory for all commercial buildings from October 2012. The new requirement is part of the coalition’s new carbon plan, which was made public in March.

Display Energy Certificates record actual energy use and have been compulsory for public buildings of more than 1,000m² of useable floor space since 2008. Extending the requirement to display energy credentials to the commercial sector will not come as a surprise to the property industry and the British Property Federation has been lobbying for DECs to be applied more widely for several years.

However, despite the benefits of DECs as benchmarks of energy performance for buildings in use, the roll-out is likely to pose a number of problems for commercial building owners and occupiers. Although DECs will not be required until October 2012, the key problem will be whether or not tenants or landlords have kept co-ordinated records of their energy bills. 

In order to produce an accurate DEC it is necessary to have:

  • energy bills for electricity and gas  consumption  for a 12 month period - the start and end date for the bills from all suppliers must match within a few days or the data cannot be used; and
  • the floor area of the building must have been measured in accordance with the Standard Method of Measurement (SMM7).

While the second of these requirements should not be a problem for landlords or tenants, it is likely that the first will be. Watts’ director Mark Rabbett explains: “Our own experience is that, for public buildings, the low cost of producing a DEC was dwarfed by the effort required to locate and co-ordinate the bills”.  When DECs were first applied to university campuses, says Mark, it was recognised that few of the buildings would have individual meters.  Time was allowed for universities to install these but, two years later, so few have done so that the Government have had to cancel plans to fine those that didn’t install smart meters and allow more time.  “However,” he adds, “the government’s record of the treatment of commercial landlords and tenants suggests that the same leniency may not apply”.

The UK Green Building Council have been tasked with producing an implementation plan.  Currently it looks like single let buildings will be addressed initially, followed by multi-let buildings up to a year later but neither the approach or the time scale is clearly laid down.

It would not be unreasonable to expect that landlords will look to install further smart metering for tenants, but these are likely to have other implications once the data begins to emerge.  It is worth considering how the common strategy of billing tenants for energy usage based upon floor area will stand up if there is clear evidence that some tenants are using much more energy than others.

Mark’s advice to landlords is to take action now to ensure that the right records are in place and that the area they are responsible for is fully demarcated.  Tenants need to raise the matter with their landlord sooner rather than later.  Sub-tenants are responsible for producing their own DEC but superior tenants need to consider how the bills will be apportioned.

By doing so, they will be able to produce DECs quickly and cheaply to meet the new requirements.

More information from Mark Rabbett, Director at Watts on 020 7280 8000

The Watts Bulletin is the technical companion to the Watts Pocket Handbook, the essential guide to property and construction, as used by professionals since 1983.

Watts Bulletin editor: Trevor Rushton.