Build Magazine June 2015

Build Magazine 47 Landlords may need to act on the new Heat Regulations. Winckworth Sherwood’s Colin Hall and Niall Carey explain. Colin Hall is a partner and Niall Carey a senior associate in the Community Infrastructure team at Winckworth Sherwood. Winckworth Sherwood has prepared a more detailed briefing on the new Heat Regulations that can be found at www.wslaw.co.uk Landlords managing existing buildings of any type will need to ask themselves the two following questions before the end of this year: • Are any of those buildings heated, cooled or supplied with hot water from a central internal or off-site boiler or chiller? • If so, is it caught by The Heat Network (Metering and Billing) Regulations 2014? If the answer to these two questions is yes, you could be what the regulations call the ‘heat supplier’ with responsibility to: • Tell the National Measurement and Regulation Office that your central system exists and to provide them with technical details so that they can build a map. • Consider putting in meters to meas- ure the heat consumption. • Maintain meters so that they remain accurate and always in operation. • Use the meters to provide custom- ers with detailed information on the heat bills. What buildings are caught by the new regulations? A building is probably caught by the Heat Regulations if it receives heat from a boiler shared with other buildings, or if the building has its own boiler which serves more than one customer. This covers a potentially very wide range of buildings including: • Residential/commercial and mixed use developments • Existing blocks of flats • Flat conversions and bedsits (with a central boiler) • Leisure centres (with concession holders) • Supermarkets (with concession holders) • Shopping centres • Office buildings with more than one tenant • Some university campuses Are meters needed in all buildings? New buildings must have them installed from the start. For existing buildings, there is time to consid- er whether it is feasible to install them. There are various rules and exceptions, but if the building is caught, meters must be installed by 31 December 2016. Feasibility depends on two questions – would meters be cost effective, and are they technically feasible? These depend on the use of the building and its fabric. Once installed, meters must be kept accurate and bills fully loaded with the information they record. If meters are not feasible, landlords will have to consider whether ‘heat cost allocators’ would be a feasible alternative. Who is responsible? The ‘heat supplier’ must perform these new duties – that is the per- son who sells the heat (or cooling) to a ‘final customer’, or the person who actually consumes the heat. So what action should you take? The starting point is to look at the heat supply contracts to decide if you are the heat supplier. On large developments the manage- ment company may fulfil that role, unless they have outsourced it all to an energy services company. In a smaller entity the landlord may have the role, in which case they need to make sure they know who is performing the duties. Enforcement of the new duties is by an escalating regime that includes a formal compliance notice, possible compensation to tenants, civil pen- alties and criminal sanctions as well as publication of offenders’ names. Jannis Tobias Werner / Shutterstock.com Regulation