Section 63

Scotland Leads the Way with Section 63

Section 63 was introduced in Scotland in 2016 and applies to larger buildings – that is with a floor area of more than 1,000mand are triggered by either sale or by lease to a new tenant.

Summary

In addition to the current EPC regulations (Commercial Energy Performance Certificate), these new energy regulations require further action to assess and improve energy efficiency and reduce the associated greenhouse gases for larger buildings.

The owner will be targeted to reduce emissions through identifying and carrying out improvement works agreed in an Action Plan (Section 63). The Action Plan is in addition to the EPC assessment and there is a legal requirement to carry out the specified improvement measures within 3.5 years or defer the improvements annually by use of a Display Energy Certificate (DEC).

The Section 63 regulations will have implications when selling and letting property, one of which is the transfer of responsibility of the Action Plan to the new Owner or Tenant.

What do the regulations require?

The building owner must undertake a further assessment to produce an ‘Action Plan’ that identifies targets for improvement of the carbon and energy performance of the building and how these targets would be met through physical improvements to the property. Once an Action Plan is finalised, the owner can choose to improve or to defer the improvements by reporting operational energy ratings (actual measured energy use via a Display Energy Certificate or ‘DEC’) on an annual basis. All Action Plans and DECs are lodged to the Scottish EPC Register.

As is the case with an EPC, the Action Plan must be made available to prospective buyers or tenants and provided to the new owner or tenant. Provision of the Action Plan is all that is required to enable marketing of the property.

Who is responsible for the Section 63 Action Plan?

The regulations require ‘owners’ of such buildings to take steps identified by such assessments. Interpretation of this will evolve and it may be that where a lease refers to the tenant being responsible for statutory regulations then they may be liable for dealing with the result of an Action Plan through improvements or carrying out an annual Display Energy Certificate (DEC).

What buildings are exempt?

  • Any buildings <1,000m– although there are murmurings this may change and affect smaller properties in due course.
  • Where a building is deemed to meet the 2002 Buildings Energy Standards.
  • Where a building is temporary or has a remaining lifespan of <2 years.
  • Where a building is not conditioned (for Heating or Cooling).
  • Prisons and young offenders institutions are exempt.

The Section 63 Action Plan

The Action Plan identifies targets in 7 areas to reduce the carbon consumption and energy performance and how these targets would be met through physical improvements to the property.

There are two types of Action Plans, ‘Prescriptive and Alternative’.

The Prescriptive Action Plan measures are:

  • Adding central time heating controls to the HVAC system.
  • Upgrading lighting controls to manual and photoelectric switching.
  • Draught-stripping windows and doors.
  • Adding insulation to the hot water storage cylinder.
  • Replacing incandescent lamps with compact fluorescent lamps – you may have spotted the lack of LEDs here – Section 63 is not yet perfect nor entirely up to date.
  • Replacing the boiler if older than 15 years.
  • Insulating accessible roof space

So you will probably notice that the Prescriptive measures are pretty basic which makes it equally certain that as this thing evolves and develops more measures will be included and the minimum level of energy efficiency in our buildings will increase – and let’s face it that can’t be a bad thing.

Section 63 only applies in Scotland

Your Section 63 Adviser (err hopefully that’s me) will highlight where these will be applicable and provide cost implications and if required look for alternative measures which will form a Tailored Action Plan to be lodged on the EPC Register and acted upon within 3.5 years.

Where the responsible party does not want to implement the Action Plan measures they are able to defer them by carrying out a Display Energy Certificate (DEC) on an annual basis.

A DEC is an operational energy rating and considers the actual energy use.

All Action Plans and DECs are lodged to the Scottish EPC Register. As is the case with an EPC, the Action Plan must be made available to prospective buyers or tenants and provided to the new owner or tenant. 

Differences between Section 63 and the MEES (England & Wales)  

It is important to note that the Scottish requirements are different from the MEES (Minimum Energy Efficiency Standards) regulations due for introduction in England and Wales.

After autumn 2018 buildings in England or Wales being marketed for sale or to let will be required to meet a minimum EPC rating of an English E before they can be legally marketed for
sale or let.

It should be remembered that an English E is often easier to achieve than a Scottish E as the rating system is different.

Enforcement

Every local authority is an enforcement authority for the purposes of these Regulations and it is the duty of each enforcement authority to enforce these Regulations in its area.

EPCs, Section 63 Action Plans and Display Energy Certificates are lodged on a central database and progress can be tracked by the Scottish Government.

A penalty charge notice applies for non-compliance

Contact Stewart King – a fully accredited Section 63 Assessor – for more information or a quotation – I have already completed Section 63s in Wick, Glasgow, Dundee and Aberdeen.