What is section 63?
Under Section 63 of the Climate Change (Scotland) Act 2009, the Scottish Government introduced regulations to improve the energy efficiency of commercial buildings. The Act requires commercial property owners to assess the energy performance and carbon emissions of their properties, and take practical steps identified through the assessment to reduce energy use and emissions.
It’s part of Scotland’s strategy to reduce greenhouse gas emissions and improve the energy efficiency of existing buildings.
Non-compliance can lead to penalties (e.g. if an owner tries to market or lease a building without fulfilling the Action Plan/lodging it etc.).
Foundation of Section 63
Section 63 is enforced through The Assessment of Energy Performance of Non-Domestic Buildings (Scotland) Regulations 2016, which outline when audits are needed, for example, when a building is being sold or leased, and how improvement measures must be planned and implemented.
Who is the legislation applicable to?
- The regulations apply to any nondomestic building, or part thereof, with a net floor area of 1,000 m² or above that is subject to sale or leasing.
- There are exemptions, for example: if the building already meets the energy standards equivalent to the 2002 Scottish Building Regulations, or if it is temporary (intended life of 2 years or less) etc.
Statutory Provisions
For a qualifying building, the owner must not only obtain an Energy Performance Certificate (EPC) in accordance with the usual rules but also ensure that a Section 63 Action Plan is prepared. The Action Plan must set out targets for energy and carbon emission improvements and detail how these improvements will be achieved.
Post-EPC Requirements
The owner may then select one of the following options:
- Either implement the measures detailed in the Action Plan within 42 months (approximately 3½ years) after lodging the plan.
- Alternatively, owners may defer implementation by submitting an annual Display Energy Certificate (DEC) and reporting the building’s energy use.
The Action Plan must be lodged on the Scottish EPC register and must be made available free of charge to prospective tenants or buyers.
Legal Consequences
The penalties for Section 63 are implemented under The Assessment of Energy Performance of Non‑domestic Buildings (Scotland) Regulations 2016.
A fixed penalty of £1,000 may be imposed if a building owner fails to submit a required Action Plan or implement its improvement measures within the prescribed timeframe.
The obligations and penalties apply only to qualifying Non-domestic buildings over 1,000 m² that are being sold or leased.