SI no 666 of 2006 provides for the transposition into Irish law of articles 5 and 7 of the EU Energy Performance of Buildings Directive (2002/91/ EC, 16 December 2002). The regulations require that every new dwelling and non-domestic building offered for sale or rent to any prospective purchaser or tenant (where appropriate, any reference hereafter to ‘purchaser’ includes ‘tenant’, and any reference to ‘vendor’ includes ‘landlord’) must have an energy rating certificate provided by a certified BER assessor.
What buildings do the regulations apply to?
- New dwellings for which planning permission was applied for on or after 1 January 2007. A transitional BER exemption applies to a new building for which planning permission was applied for on or before 31 December 2006, provided that substantial work has been completed by 30 June 2008.
- New non-domestic buildings for which planning permission was applied for on or after 1 July 2008. A transitional BER exemption applies to new non-domestic buildings for which planning permission was applied for on or before 30 June 2008, provided that substantial work has been completed by 30 June 2010, except when such building is offered for a second or subsequent sale or letting.
- Existing buildings of any class when offered for sale or letting on or after 1 January 2009.
Other exemptions are set out in the regulations.
It should be noted, however, that buildings availing of the transitional exemptions could be caught by the requirement to produce a BER certificate on a subsequent sale.
A provisional BER certificate is required if the vendor is selling from plans: this lapses on the sooner of completion of the building or the expiry of 24 months, and, in respect of completion of construction, a full BER certificate and advisory report is then required for any sale or letting.
Under the regulations, “substantial work has been completed” means the structure of the external walls of the buildings has been completed.
What is a BER certificate?
SI 666 of 2006 is concerned with providing prospective purchasers with standardised information concerning the energy rating of a building. A BER certificate simply provides in a prescribed form a rating of the energy consumption of the building. The BER certificate must be accompanied by an advisory report produced by the BER assessor, which may recommend improvements to the energy performance of the building. However, there is no obligation on either a vendor or prospective purchaser to make the recommended improvements and there is no requirement that a building should achieve any particular level of energy rating.
Is a solicitor an ‘agent’ for the purposes of the regulations? Regulation 7(2) imposes the obligation on a “person who offers for sale or letting … a building” to produce the BER certificate and advisory report. This obligation extends to “any agent acting on behalf of such person”. However, the term ‘agent’ is not in fact defined for the purposes of the regulations. It is the view of the committee, however, that a solicitor acting in a conveyance/letting on behalf of a vendor is an agent of the vendor and is prima facie caught by the obligations of article 7(2).
At what stage should a BER certificate be produced?
In the ordinary course of property transactions, including auctions, the owner or the estate agent or auctioneer will have advertised, promoted or otherwise transmitted information to potential purchasers before a solicitor is instructed to produce contracts or a letting agreement. It could thus be expected that the obligations of article 7(2) will already have been fulfilled by the time a solicitor is appointed. In cases where the vendor or his selling/letting agent have not already sought or obtained a BER certificate, it is the view of the committee that a solicitor acting in the sale/letting as agent of the vendor would be duty-bound to draw to the attention of the client or the client’s agent the necessity of producing a BER certificate and advisory report to every potential purchaser. If the client has not obtained a BER certificate by the time the solicitor is instructed in the sale, it is the view of the committee that the client will have to be told by his solicitor that a contract/letting agreement cannot be sent out until such time as a BER certificate has been obtained.
Can one contract out of these obligations?
It should be noted that there is no provision enabling a prospective purchaser to waive the obligation to be provided with a copy of a BER certificate and, similarly, the committee is of the view that no acknowledgement by a purchaser that a copy of a BER certificate has been received would overcome any failure to provide one.
Can there be retrospective compliance with the regulations?
It is the view of the committee that failure to provide a BER certificate before a contract/letting agreement is signed cannot be remedied by a subsequent provision of such certificate unless the purchaser is simultaneously given the opportunity to back out of the contract. The clear import of the regulations is to ensure that prospective purchasers have the relevant information concerning the energy usage of a building they are contemplating buying or leasing. That objective cannot be fulfilled if the purchaser is bound to a contract in advance of knowing the information.
What is the position of the purchaser?
There is no apparent obligation on a purchaser to have regard to the content of a BER certificate in making a purchase/letting. Nor is there any requirement that such a purchaser seek or obtain a certificate from the ven dor. The obligation is solely on the vendor to provide one. In those circumstances, the committee does not believe that it is necessary for a purchaser’s solicitor to raise a requisition on title in relation to a provision of the BER certificate.
However, it would probably be beneficial to the purchaser for the solicitor acting to discuss the subject of BER certificates, particularly if the purchaser was likely to be reselling the property in the near future. Obviously, if the purchaser is buying a property to refurbish it or extend it, the BER certificate obtained from the vendor will be worthless as soon as that work is done, and a new BER certificate will be required before the purchaser sells or lets the property. If the purchaser has no intention of selling in the immediate future or of altering the house, it might be useful to keep a copy with the deeds. For that reason, the committee has decided to add a request for a copy of the BER certificate to the non-title information sheet forming part of the standard contract for sale when a new edition of the contract document is being printed. The request will be along the lines of: “Furnish BER certificate or confirm that it has been furnished to the proposed purchaser”.
Are obligations under the regulations cumulative?
The committee’s view is that it is probably not the intention of the regulations that the obligation to produce a BER certificate is cumulative. If the vendor produces a BER certificate to a prospective purchaser, it is felt that it is not necessary for the estate agent or the solicitor to do so as well. It would nevertheless be prudent for a solicitor to ensure that the appropriate certificate was produced by either of the other parties. However, the fact that other persons simultaneously have the obligation to produce a BER certificate does nothing, in the view of the committee, to alleviate the obligation of a solicitor acting as agent to produce such a certificate.
Is there a continuing duty?
The requirements of the regulations do not impose an obligation for a building to have a current or existing BER certificate. It may be prudent to keep such a certificate as evidence that the regulations were complied with at a relevant time. However, there does not seem to be any penalty for being the owner of a building that does not have a BER certificate. The only other apparent benefit in retaining the certificate for as long as it is valid is in case the purchaser subsequently wishes to dispose of the property.
It is not considered by the committee that a solicitor who has acted in a sale has any ongoing obligation to maintain a BER certificate. However, as mentioned already, it is a useful document that could with advantage be kept with the title deeds. However, if not so kept, it is replaceable in the sense that a new assessment can be obtained, although this would be a matter of some expense for the client.
What if a BER certificate is rendered invalid?
In the normal course of things, a BER certificate remains valid for ten years, after which a further assessment is required in the event of a sale or letting. Article 16(5) creates a particular difficulty, insofar as a perfectly valid BER certificate may be rendered invalid in circumstances where there is:
a) A significant deterioration of the fabric (of the building),
b) An extension, or
c) A change in the heating system or type of fuel used.
It seems logical, therefore, that if an invalid certificate is offered to a prospective purchaser/lessee, there would be a failure to comply with article 7(2), because the certificate is invalid and hence no certificate is produced. It is not clear how or in what circumstances an assessment will be made as to whether any of the changes of the type referred to above have occurred. However, if, on a spot check, it is found that an invalid certificate is proffered, any of the owners or agents involved may inadvertently cause a breach of article 7(2). The only protection that a solicitor might obtain, in the circumstances where a BER certificate is not a recently issued one, is to obtain a written declaration from the client that the circumstances set out in article 16(5) have not occurred. Regrettably, the term ‘significant deterioration in the fabric’ is not defined in the regulations, and, thus, little guidance can be gleaned. An extension to the building or change in the heating system or type of fuel may be more obvious. It is possible that multiple BER certificates may be needed in the event of substantial renovations and/or extensions.
Penalties for breach of the regulations
While it would appear that failure to produce a BER certificate does not have any consequences in conveyancing terms for the title or for the validity of the transaction, failure to comply with the regulations renders the person concerned liable to prosecution. Article 10 provides that a person who contravenes any requirement of the regulations commits an offence. Such an offence is punishable by fine on summary conviction not exceeding €5,000 and, in the case of a breach of article 23(3), which essentially refers to the obstruction of an authorised officer, may also include a term of imprisonment.