Explained: Section 63 in Scotland and differences with the MEES scheme in England


Gordon Black

By Gordon Black and Alan Maxwell, Project Management and Construction Consulting, CBRE Scotland

With a continued and increased focus on sustainability, our clients are increasingly focusing on building energy ratings when considering transactions. As clients are generally more familiar with the MEES scheme in England and Wales, it is important that we can advise them on the relevant Scottish legislation.

context

In England and Wales, the Minimum Energy Efficiency Standards (MEES), introduced in 2018, require all property, including non-domestic/commercial, to meet a minimum energy standard in order to be sold or let, including renewals of lease. MEES regulations mean it is illegal to rent properties with an Energy Performance Certificate (EPC) below an ‘E’ rating, which is expected to drop to a minimum ‘B’ rating by 2030.

However, MEES regulations do not apply in Scotland, which can often confuse clients and colleagues outside of Scotland.

In Scotland, the Climate Change Act Scotland 2009 (Section 63) and The Assessment of Energy Performance in Non-Domestic Buildings (Scotland) Regulations 2016 are the relevant legislation, requiring building owners to improve energy efficiency and reduce emissions emissions in non-domestic/commercial buildings. buildings. There is no minimum EPC rating when selling or letting a building with a footprint of more than 1000m² in Scotland (unlike England and Wales), the approach rather being based on demonstrating equivalence with the Scottish Building Regulations 2002 or later.

An EPC is required for all non-domestic properties under construction, sale or rental and must be produced by an accredited non-domestic energy assessor (such as CBRE). EPCs are valid for ten years and can be reused during this period if necessary.

Rule 63 Key points

  • Section 63 legislation only applies to the sale or letting of buildings in Scotland.
  • It only applies to buildings or areas/floors of buildings larger than 1,000 m² (10,764 ft²).
  • An EPC for the building must also be provided, stating that any EPC produced after 2016 will indicate whether the building meets the 2002 standard or requires further assessment (commonly referred to as a Section 63 assessment).
  • If required, a Section 63 assessment will be undertaken with improvement measures identified and an action plan produced.
  • Typical improvement measures may include energy efficient lighting, improved lighting controls, increased insulation levels, more efficient heating/cooling systems, low and zero carbon technologies (eg. example, photovoltaic solar panels), etc.
  • If improvement actions are taken, a new CPE can be produced to demonstrate compliance with Section 63.
  • Otherwise, the action plan will identify recommended actions to ensure compliance, which must be undertaken within 42 months.
  • The CPE and the action plan must be in place before the negotiations.
  • The CPEs and action plans must be made available free of charge to potential buyers or tenants, the most recent version must be provided.
  • If the improvement works have not been completed before, with a new CPE or an action plan provided, sales or rental fines may be applied.

Postponement of section 63

If the contracting authority does not wish to carry out the improvement measures to bring itself into compliance within 42 months, it can defer the improvements by filing a Billboard Energy Certificate (DEC). The DEC provides information on the building’s actual measured energy consumption and associated carbon emissions and must be filed annually until improvements are made and completed. If the building owner fails to complete the improvement measures within the stipulated time, fines may be applied.

EPC Rating Differences

It is important to note that due to differences within EPC rating systems and nuances in calculation methodologies, EPC ratings in Scotland and England and Wales may not always be equivalent, a rating ” C” in England does not necessarily translate to “C”. ranking in Scotland.

Rating differences for an identical building in Scotland and England should be established by full EPC calculations, as while it is typical for a lower EPC rating to be achieved in Scotland, this is not guaranteed. You can’t say, for example, that a ‘D’ grade in England would translate to an ‘E’ grade in Scotland, because that wouldn’t necessarily be the case.

Where a client has properties in Scotland as well as England and Wales, it is important that they are aware that there are differences in the system, ensuring compliance with relevant legislation and not assuming not that the EPC rating systems are equal.

Exemptions

There are situations where buildings are exempt from Section 63 as below:

  • Buildings with a floor area of ​​less than 1,000 m² (10,764 ft²).
  • Buildings that meet or exceed the equivalent energy standards of the Scottish Building Regulations 2002 (this may include older buildings where energy improvement measures have been implemented).
  • Temporary buildings with an expected lifespan of two years or less.
  • Workshops and agricultural buildings complying with the “low energy demand” rule.
  • Prisons and establishments for young offenders.
  • Buildings participating in the Green Deal program.

Future changes

The next stages of MEES legislation in England and Wales have progressed, with the minimum EPC rating for buildings to be upgraded to a ‘B’ rating by 2030.

The next steps and development of legislation in Scotland is yet to be confirmed, and is likely to be will revise the section 63 approach to require further improvements, set minimum standards (similar to the approach MEES in England and Wales) or will adopt an operational rating approach (using actual building performance, monitoring energy consumption and resulting emissions as the basis for regulation).

Consultations are ongoing in a number of fora, with the Scottish Government’s Building Heat Strategy noting that consultation on the regulatory approach is due to take place in 2022, with the intention of introducing regulations by 2025.

The Engineering consultancy team in Scotland are ideally placed to provide expert Section 63 compliance advice as well as assistance in carrying out EPC/Section 63 assessments and developing design solutions for improve the energy performance of buildings in order to meet and exceed the requirements of the legislation.

Alan Maxwell

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