In the past, we have concentrated on Energy Performance Certificates and the MEES Regulations in England and Wales and the equivalent regime in Scotland and also discussed green lease provisions generally.  This article gives an update on sustainability and voluntary rating schemes.

If the building benefits from a voluntary sustainability rating, a lease is more likely to include express green lease provisions. In addition, the higher the rating, the more likely those green lease provisions will include greater controls on the tenant, including obligations to co-operate with each other, share data, and covenant not to adversely affect any existing rating.

So, in addition to the statutory EPC system, the voluntary schemes that a buildings may benefit from include a BREEAM rating or a NABERS UK rating. If evidencing sustainability credentials is a key driver for a business, having an additional sustainability rating may be an important factor in choosing a property to let. Below, we have set out the key features associated with the BREEAM and NABERS rating schemes.

BREEAM key features

  • The BREEAM rating uses a scale of acceptable (for the in-use scheme), pass, good, very good, excellent and outstanding.
  • The ratings are available for new construction, refurbishment and fit-out and buildings in use.
  • The rating takes into consideration design factors through to ecological value, which includes for example, assessing management, water and energy use, transport, health and wellbeing, pollution, materials and waste.
  • The assessments are undertaken by BREEAM assessors and then reviewed by a third party as an impartial certification process.
  • BREEAM certificates are valid for 12 months for in-use buildings, three years for new construction and during the design and construction phase for the refurbishment and fit-out certificate.

NABERS UK key features

  • In the UK, the scheme is administered by the Chartered Institution of Building Services Engineers. The scheme is based on the Australian NABERS scheme.
  • The scheme is primarily for office buildings (although this is expanding to shopping centres and retail stores) and currently has two rating schemes, one to drive efficiency in new builds (Design for Performance) and one for existing offices (Energy for Offices).
  • The Scheme measures actual energy use.
  • The rating runs from one star to six stars, with a six star rating being the highest rating.
  • The scheme provides for an annual certification.
  • There are three types of office rating:
    • a base building rating;
    • a tenancy rating; and
    • a whole building rating.
  • The scheme helps create a benchmark and provide strategies for making improvements.
  • There is also a Co-assess system which is aimed at bringing building owners and tenants together to aid co-operation on the drive to greater sustainability.

The recent BCO report on a new system for grading offices notes that 96.5% of respondents rated sustainability certifications such as EPC, BREEAM, NABERS as essential to office quality – more than any other factor. It is clear that ratings schemes are here to stay.

If you have any queries about this topic, or anything else related to real estate, please email Leonie Hall or your usual Brodies contact.

Contributor

Leonie Hall

Legal Director