A commercial building in England and Wales must have an Energy Performance Certificate at three legal trigger points: when it is sold, when it is let, and from the moment it is put on the market for either. The duty comes from regulation 6 of the Energy Performance of Buildings (England and Wales) Regulations 2012 (SI 2012/3118), which requires the seller or landlord to make a valid EPC available free of charge to any prospective buyer or tenant at the earliest opportunity. Miss the duty and the local authority can issue a penalty charge of 12.5% of the building's rateable value, between £500 and £5,000, under regulation 38 of SI 2012/3118.
SI 2012/3118 applies to England and Wales only. Scotland runs its own regime under the Energy Performance of Buildings (Scotland) Regulations 2008, with section 63 action plans for larger non-domestic buildings, and Northern Ireland has separate regulations again. The rules below are the England and Wales ones.
Two related questions sit either side of what follows. Assessment fees, what drives them and how to buy well belong in our guide to commercial EPC costs. And holding a certificate is not the same as being allowed to let on it: the minimum energy efficiency standard is a separate statute with its own bands, exemptions and penalties, dealt with at the end here and in full in our commercial MEES guide. If your building is residential, start with our general EPC guide instead; the commercial rules run on different assessment methods and different penalties.
When the law requires a commercial EPC: sale, letting and marketing
Regulation 6 of SI 2012/3118 places the core duty on the "relevant person", the seller or prospective landlord. They must make a valid EPC available, free of charge, to any prospective buyer or tenant at the earliest opportunity, and in any event no later than the first time written information about the building is provided or the building is viewed, whichever comes first. They must also ensure that the person who ultimately buys or rents the building has been given a valid EPC. The full text is at regulation 6.
Regulation 6(3) allows the certificate to be withheld only in narrow cases: where the relevant person reasonably believes the enquirer is unlikely to have the means to buy or rent the building, is not genuinely interested in buildings of that type, or is not someone to whom they would be prepared to sell or let. Regulation 6(4) adds that none of this authorises unlawful discrimination, and even where a prospective enquirer was lawfully refused a copy, regulation 6(5) still requires the eventual buyer or tenant to be given one.
Regulation 7 adds the marketing trigger. Where a building is to be sold or rented out and no valid EPC exists, the relevant person must secure that one is commissioned before the building is put on the market, and an agent acting for them must check that this has happened before marketing begins. The relevant person must then use all reasonable efforts to obtain the certificate within 7 days of the building first going on the market; if, despite those efforts, it has not arrived, a further 21 days is allowed. Marketing without commissioning is itself a breach, separate from failing to hand the certificate over.
Regulation 11 requires the EPC's asset rating to be stated in any advertisement of the sale or rental in commercial media. And regulation 7A applies the certificate duty to construction: when a non-domestic building is erected, an EPC must be obtained and given to the owner. The main carve-out at the other end of a building's life is regulation 8, which relieves the sale and letting duties where the building is genuinely due for demolition and the paperwork (planning applications, consents) supports that.
| Event | EPC required? | Provision (SI 2012/3118) |
|---|---|---|
| Selling the building (freehold or lease assignment) | Yes, valid EPC to prospective and actual buyer | reg 6 |
| Granting a new lease or sub-lease | Yes, valid EPC to prospective and actual tenant | reg 6 |
| Putting the building on the market | Yes, EPC must be commissioned before marketing | reg 7 |
| Advertising in commercial media | Asset rating must appear in the advertisement | reg 11 |
| Completing a newly constructed building | Yes, EPC to the owner | reg 7A |
| Lease renewal to a sitting tenant | Not usually (see next section) | reg 6 (by construction) |
| Building held and occupied, no transaction | No standing duty to hold an EPC | Part 2 scheme |
There is no general obligation for a commercial building simply to have an EPC at all times. The duties bite on transactions and marketing. An owner-occupier who bought before 2008 and has never let or marketed the building may lawfully have no certificate. The moment a sale or letting is contemplated, the clock starts.
Sub-letting, assignment and lease renewal: who obtains the EPC
The regulations allocate the duty to whoever is disposing of an interest, not to "the landlord" as such. On a sub-letting, the tenant granting the sub-lease is the relevant person: they are the prospective landlord of the sub-tenant, so the regulation 6 duty is theirs. On an assignment, the outgoing tenant selling their leasehold interest is the relevant person and must make a valid EPC available to the assignee.
In both cases the crucial practical point is that the duty is to make a valid EPC available, not to commission a fresh one. An EPC belongs to the building, or the building unit, and travels with it through every transaction in its life. If the head landlord registered a certificate six years ago, the sub-letting tenant can rely on it; the first step in every case is a register search at find-energy-certificate.service.gov.uk rather than a call to an assessor.
Lease renewals sit in a genuine gap. SI 2012/3118 says nothing express about renewals, and the regulation 6 duty runs to a "prospective" buyer or tenant, defined by reference to requesting information, viewing, or making an offer. A sitting tenant renewing does none of those things in respect of a building they already occupy, and government guidance has consistently taken the position that a renewal or extension to the same tenant does not normally require an EPC. Treat that as the working rule, but note the boundary with the minimum energy efficiency standard at the end of this page: for lettability purposes a renewal is very much a live event, and the two regimes answer different questions.
Which commercial buildings are exempt, and why listing alone is not enough
Regulation 5 disapplies the whole of Part 2 (the EPC duties) for a defined list of buildings:
- Officially protected buildings, protected as part of a designated environment or for special architectural or historical merit, in so far as compliance with certain minimum energy performance requirements would unacceptably alter their character or appearance;
- Places of worship, buildings used as such and for religious activities;
- Temporary buildings with a planned time of use of two years or less;
- Industrial sites, workshops and non-residential agricultural buildings with low energy demand;
- Non-residential agricultural buildings in use by a sector covered by a national sectoral agreement on energy performance;
- Residential buildings intended to be used less than four months a year, or with limited annual use and expected energy consumption below 25% of all-year use;
- Stand-alone buildings with a total useful floor area of less than 50 square metres.
The listed-building category needs particular care. The exemption is conditional, not automatic. A building is outside the EPC regime only in so far as compliance with minimum energy performance requirements would unacceptably alter its character or appearance. A Grade II listed bank hall where the recommended measures would mean stripping historic fabric may well qualify; a listed building whose recommendations amount to LED lighting, heating controls and draught-proofing probably does not, because nothing in those measures alters character or appearance at all. Nobody certifies the exemption for you: the owner carries the judgement and the risk, and if a local authority disagrees, the penalty charge regime below applies. Many owners of protected commercial stock simply commission the EPC, which is cheaper than the argument.
Note also what is not on the list: there is no exemption for small businesses, for short leases, for buildings in poor condition, or for tenanted buildings the landlord cannot access. If the building is let or sold and none of the regulation 5 categories applies, the duty stands.
How long does a commercial EPC last?
An EPC is valid for the sale and letting duties for 10 years from the date it was entered on the register. The rule is in regulation 9(2) of SI 2012/3118, and it has a second limb that catches people out: the certificate is valid only if no other EPC for the building has since been entered on the register. Commission a new assessment, perhaps after a refurbishment, and the new certificate supersedes the old one immediately, even if the old one had years left. That cuts both ways: a new assessment after works that improved the building refreshes the rating, but a casually commissioned reassessment that lands a worse band replaces a better certificate you could otherwise have relied on.
Check the register before you spend anything. The non-domestic register at find-energy-certificate.service.gov.uk is free to search, and a valid in-date certificate from a previous owner or letting may already exist. You do not need a new EPC for every re-letting either; one certificate serves every transaction within its 10-year life. And expiry mid-tenancy forces nothing by itself: if the certificate lapses while a tenant is in occupation, no duty to renew arises until the next trigger event, the next marketing, letting or sale. There is no offence of "having an expired EPC".
Validity is also tied to who produced the certificate. Under regulation 22 of SI 2012/3118 the energy assessor must be a member of an accreditation scheme approved by the Secretary of State, and regulation 22(2)(a) allows that approval to be limited by category of building. Commercial work is therefore done by non-domestic assessors, in the schemes' Level 3 to 5 categories, rather than by the domestic assessor who does houses and flats. Those level labels are a scheme convention, not a statutory term. To find one, use the government's get an energy certificate service, which routes you to a search of accredited assessors by postcode and property type, and choose the business-property route rather than the domestic one. Our residential-side guide to booking an EPC walks the instruction process; the accreditation logic is the same, the assessor type is not.
Three certificate regimes sit in one instrument
SI 2012/3118 actually runs three certificate regimes, and conflating them wastes money in both directions.
| Regime | Who it applies to | What it measures | Provisions |
|---|---|---|---|
| Energy Performance Certificate | Any building being sold, let or marketed | Theoretical (asset) energy performance of fabric and services | Part 2, regs 5 to 13 |
| Display Energy Certificate (DEC) | Buildings occupied by public authorities and frequently visited by the public | Actual metered energy use, displayed on the premises | Part 3, regs 14 to 16 |
| Air-conditioning inspection report | Systems with effective rated output over 12kW | Efficiency of the air-conditioning plant, inspected at least every five years | Part 4, regs 17 to 21 |
A privately owned shop, office or warehouse never needs a DEC, whatever its size; DECs are a public-buildings regime. But a private commercial building can owe an air-conditioning inspection report entirely independently of any sale or letting: if the combined effective rated output of the air-conditioning systems exceeds 12kW, the person who controls the system must have it inspected by an accredited assessor at least every five years, transaction or no transaction. This is the one standing, always-on duty in the instrument, and it is routinely missed by owner-occupiers who correctly conclude they need no EPC.
Each regime carries its own penalties under Part 7, and the two DEC amounts run the opposite way to intuition: £1,000 for failing to hold a valid advisory report, a breach of regulation 14(3)(a), and £500 for failing to display the DEC itself, a breach of regulation 14(3)(b). Air-conditioning duties are £300 per breach. EPC breaches use the rateable-value formula described below.
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Mixed-use buildings: domestic EPC, non-domestic EPC, or both
The classic case is the shop with a flat above, and the answer turns on how the parts are designed or altered to be used rather than on who happens to occupy them. Where the building contains parts designed or altered for separate use, the flat with its own entrance, the shop with its own, each part is certificated separately: a non-domestic EPC for the shop produced by a commercial assessor, and a domestic EPC for the flat produced by a domestic assessor. Selling the whole building means both certificates; letting just the flat means only the domestic one.
Where the parts are not separable, a flat reached only through the shop, let together with it on a single lease as staff accommodation, the building is more likely to be assessed as a single unit, and the assessor's judgement on the design of the accommodation determines the method. The safe sequence for any mixed-use owner is: search the register for existing certificates against each address, then put the separability question to an accredited non-domestic assessor before commissioning, because commissioning the wrong certificate type buys you nothing legally. The tax side of mixed-use buildings has the same splitting flavour, apportioning between the commercial and residential parts, and our guide to commercial property tax for landlords covers where those lines fall.
What trading standards can actually charge you
Enforcement belongs to local weights and measures authorities, in practice trading standards, under regulation 34 of SI 2012/3118. Regulation 35 lets an authorised officer require you to produce copies of the EPC and recommendation report, with a £200 penalty for failing to comply. Where the authority believes a breach has occurred it may issue a penalty charge notice under regulation 36, generally within six months of the breach.
The amounts are in regulation 38 of SI 2012/3118, and for non-dwellings they are a formula, not a flat figure (the full text is at regulation 38):
| Breach | Penalty (SI 2012/3118 reg 38) |
|---|---|
| EPC breach, building is a dwelling | £200 fixed |
| EPC breach, building is not a dwelling | 12.5% of the rateable value of the building, minimum £500, maximum £5,000 |
| Non-dwelling with no rateable value on a rating list, or a hereditament covering several buildings (reg 38(2)(d)) | £750 default |
| Failure to hold a valid advisory report (reg 14(3)(a)) | £1,000 |
| Failure to display a required DEC (reg 14(3)(b)) | £500 |
| Air-conditioning inspection duties | £300 |
| Failure to produce documents under reg 35 | £200 |
A worked example shows why the formula matters. Renata's SPV owns three commercial buildings in the same market town, and markets all three without checking the register. None has a valid EPC. The former bank branch has a rateable value of £22,000: 12.5% is £2,750, and that is the penalty charge. The kiosk on the forecourt has a rateable value of £3,000: 12.5% is £375, which is below the floor, so the charge is lifted to the £500 minimum. The lock-up store behind has never appeared on the rating list, so the £750 default applies. Three buildings, three different numbers, £4,000 in total, and every one of them avoidable with a free register search and a commissioned assessment before marketing. Paying a penalty charge does not discharge the duty either: the certificate still has to be obtained.
The procedure has genuine safeguards. The notice must allow at least 28 days to pay or to request a review. Regulation 37 provides a defence where the relevant person can show a certificate was commissioned in time and, despite all reasonable efforts, could not be obtained before the deadline. On a review request the authority must reconsider under regulation 39 and withdraw the notice if satisfied a defence is made out or the notice should not have been issued; if the authority confirms the notice, regulation 40 gives a further appeal to the county court within 28 days. Enforcement is administrative end to end; no criminal offence and no criminal record is involved.
Read the legislation directly and you will hit a regulation 38 in each of two different instruments. The minimum energy efficiency standard regulations (SI 2015/962) contain their own regulation 38, which deals with MEES penalty notices and has nothing to do with these amounts. A bare citation of "regulation 38" without its SI number conflates two different statutory regimes; the EPC penalty formula above is regulation 38 of SI 2012/3118 and only that.
The tax position: is the fee deductible, and can you recover the VAT?
The assessment fee is a revenue expense of the property business. It is a recurring regulatory compliance cost incurred wholly and exclusively for the purposes of the letting business, deductible against rental profits in the same way as other professional and compliance fees, for individual landlords against property income and for companies in the corporation tax computation. HMRC's Property Income Manual sets out the treatment of professional costs at PIM2120. The certificate improves no asset and secures no enduring advantage beyond its 10-year statutory life as a compliance document. The one exception is a certificate commissioned solely for a sale, which is an incidental cost of the disposal rather than an expense of the rental business and belongs in the capital gains computation.
The VAT is where commercial landlords diverge sharply, and the driver is the option to tax. Lettings of commercial property are exempt from VAT by default, and an exempt landlord cannot recover input VAT on costs of making those supplies. A landlord who has opted to tax the building charges VAT on the rent and can recover input VAT on related costs, the assessor's fee included; the mechanics are in VAT Notice 742A.
Take Callum, whose company lets a unit exempt, with no option to tax. His assessor quotes £450 plus VAT (an illustrative mid-band commercial assessment figure; real pricing and what drives it sit on the commercial EPC cost page linked above). Callum pays £540 and recovers nothing: the £90 of VAT is a real cost. His neighbour, opted to tax on an identical unit, pays the same invoice and recovers the £90, a true cost of £450. Both companies deduct their respective net cost against profits in the CT computation. On a single certificate the difference is small; across a portfolio recertifying on a rolling 10-year cycle, it compounds, and for a company landlord EPC expiry dates belong in the same compliance calendar that drives the CT cycle.
The improvement works an EPC's recommendation report prompts are a different matter. New plant, lighting, heating and ventilation are frequently capital, and commercial property (unlike dwellings) has full access to plant and machinery allowances on qualifying fixtures. If a poor rating is pushing you toward spend, read our guide to capital allowances on commercial property before the works are specified, because the allowances position is far easier to secure before contracts than after. The financing side of any upgrade sits with the usual interest-relief rules for commercial property, covered in our Section 24 and commercial property guide.
Having an EPC is not the same as being allowed to let
Everything above answers one question: must an EPC exist for this transaction? A different statute answers the next one: is the rating good enough to let at all? The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (SI 2015/962) prohibit letting, and since 1 April 2023 continuing to let, non-domestic property below band E unless a valid exemption is registered. Claims of an EPC C or EPC B deadline for commercial buildings describe consultation proposals, not law; the enforceable minimum is band E, and the trajectory is unpicked in our commercial MEES guide. A building can therefore be fully EPC-compliant under SI 2012/3118, certificate commissioned, registered and handed over, and still be unlawful to let under the 2015 regulations because that certificate shows an F.
The sequence when a transaction is approaching is short: search the register, commission a non-domestic assessment before marketing if nothing valid exists, and put the invoice through the property business. The register search costs nothing and the assessment takes days. The only expensive version of this is the one commissioned after the board goes up.