Understanding Section 63 legislation
If you’re based in Scotland, and own a commercial property or unit with floorspace of more than 1,000sqm, and you’re selling or creating a new lease, you’re most likely subject to Section 63 legislation.
That means, in addition to the requirement to produce an Energy Performance Certificate (EPC) for possible buyers or tenants, you also need to instruct a Section 63 assessment.
‘Section 63’ means Section 63 of the Climate Change (Scotland) Act 2009 — The Assessment of Energy Performance of Non-domestic Buildings (Scotland) Regulations 2016. It’s designed to improve energy efficiency and decrease carbon emissions from commercial buildings and units.
Do I need a Section 63 assessment?
Yes, if your commercial property is more than 1,000sqm, unless:
- A lease is being amended or extended, or reassigned to a new tenant
- Your building has been improved through the Green Deal, is exempt from EPC regulations or already meets energy standards that equate to 2002 building regulations
- You transact before construction finishes
- Leases or short term (16 weeks or less) and non-extendable within 12 months
- The building will only exist for two years or less
- It’s a workshop or non-residential agricultural building
How do I get started?
Almost every commercial property owner or landlord needs an Energy Performance Certificate when selling or leasing a building. That process will tell you whether you need a Section 63 assessment or not. If you do, your EPC assessor should be able to do that for you, too.
How does it work?
Section 63 assessments are calculated against set criteria:
- Lighting sensors and energy efficient bulbs
- Heating timers
- Hot water insulation and boiler age
- Roof insulation
They won’t always all apply. If you can’t access the roof space or hot water pipes, for example, you can’t do anything about the insulation.
Your Section 63 Action Plan
Every Section 63 assessment generates an action plan, even if all it says is ‘no action needed’. That’s unusual, however, and you’re more likely to receive an action plan based on the measures from the assessment. If, however, those wouldn’t be cost-effective (in other words, if they’d cost more than they’d save over a given period of time), you’ll be given an ‘alternative’ action plan identifying other ways to improve efficiency and reduce emissions.
Once your assessment is done and your action plan is complete, it’ll be lodged with the relevant EPC register and made available to all potential buyers or tenants.
What happens next?
You’ll have to implement your action plan eventually. However, you can defer it by creating and displaying a Display Energy Certificate (DEC) once a year. The idea is that it shows how you’re working to reduce emissions and increase energy. That’s called the operational route.
If you choose to implement the plan right away, you’ll have 42 months — 3.5 years — to complete improvements. That might be done by you or the new owner/tenant, but whoever takes on the work must complete it within that timescale.
Your complete guide
We’ve put all this information, and more, in our definitive guide to Section 63, which you can download here. Our specialist advisors are also here to help on on 0141 255 1360, or by clicking here.