Tags

, , , , , , , ,

In our earlier post “Check list before buying a property in France” we briefly listed the compulsory technical certificates that the seller has to provide to the buyer. Let’s have a look at one of the most important but also most “controversial”, the energy performance certificate (“ D.P.E.” standing for “Diagnostic de Performance Energétique” in plain French) and why it is becoming a key factor when buying or selling your home in France.

The DPE gives a measure of the energy consumption and greenhouse gas emission. Its aim is to inform the potential buyer about the level of heat insulation and energy spending, and the type of work to upgrade insulation and heating efficiency in order to reduce energy consumption. Since the 1st January 2011, any advertisement for selling a flat or house* has to mention the energy and greenhouse gas classification. Therefore, the DPE has to be performed before putting your property on sale. Today, nobody takes the risk to sale its property without a DPE as it could lead to cancellation of the transaction or decrease of the property price, in case there is a prejudice for the buyer. However, as long as the DPE has been established, it solely informs the future buyer but is not legally binding. The buyer cannot legally sue the seller on the results or content of the DPE (unless it was performed deceitfully and or illegally**).

The DPE has to be undertaken by a professional certified by a certification organisation (CO). The CO should be accredited by the COFRAC (Comité francais d’accréditation, CO list on http://www.cofrac.fr/ and on the website of the “Ministère de l’écologie du développement durable”http://diagnostiqueurs.application.developpement-durable.gouv.fr/index.action). A directory lists all professional with valid certification; the certificate can be checked with its number. You can also access a list of all certified professionals within your area.

Which information should be in the DPE?

  • Building’s characteristics and description of equipment (heating system, water, air…)

  • Indication for each type of equipment of the actual or estimated quantity of energy consumption on an annual basis, and an estimation of yearly energy cost resulting from this consumption

  • Evaluation of annual quantity of greenhouse gas emission in relation to the energy consumption

  • Evaluation of quantity of renewable energy used

  • Classification of the property in relation to the energy class ( from A for the best to G for the worst) and greenhouse gas class (see below pictures with energy and greenhouse gas bands)

  • Recommendations for reducing the property’s energy consumption, especially the work that could be undertaken to improve energetic performance, and the evaluation of correlated cost together with impact on efficiency.

  • However, for DPE performed under the “invoice” method (this may be the case for building older than 1947) the financial assessment of energetic improvement is not compulsory.

New” DPE since the 1st of April 2013:

The DPE’s reliability has been controversial since its inception in 2006. The well-known consumer association “UFC Que Choisir” performed several tests in 2008 and in 2011. The DPE results varied significantly from one certified professional to another, the biggest discrepancy was for a property assessed at band B by one and E by another, while yearly energy cost ranged from 1 to 3… The consequence has been a complete revision and upgrade of the DPE with a new version since 1/04/2013, the main new features are:

  • Higher number of factors to set up the DPE from 30 to 60

  • Improved standard calculation and methodology (3CL-DPE).

  • All software used by the certified professionals has to be validated by the ADEME (performance energy agency).

  • All certificates to be transferred to ADEME

  • Professionals in charge of the energy assessment to be better trained and with higher qualification requirements

  • Better transparency of results presented to the home’s owner

New DPE for building estate with central heating

A new DPE has to be performed before the 31/12/2017, for block of flats with collective heating system, or collective air cooling system. Additionally, block of flats (“copropriété”) of more than 50 parts for which planning permission was granted before 1/01/2001, will have to perform an energetic audit. Once the DPE or energetic audit has been performed the general assembly of the “copropriété” may decide to vote for building work leading to energy saving. These works may include improvement within the private parts of each flat.

Requirement to publish DPE results in all ads for property for sale since 1/01/2011

Since the 1/01/2011 all property advertisement for selling a flat or a house has to mention:

  • the energy class and greenhouse gas class if the ad is on written newspaper

  • for an ad on the internet, or at a professional’s office (estate agent, notaire…) the ad should include the energy pictogram with a clear indication of the energy consumption by KWh/m2 per year and green house gas emission by kgr/m2/year of C02 emission as per the representation:

DPE 1  DPE 2

Energy tax rebate :

In case your new property is to be your main residency in France, you may take advantage of tax credit for setting up energy efficiency equipment. We will come back to this in a future post.

Valid for how long ?

The DPE is valid for 10 years, whether you performed improvement work or not after the DPE was issued. The older “controversial” DPE established before 1/04/2013 is still valid as long as it is less than 10 years old. Obviously, it is better to get a new DPE if you performed heating efficiency and /or insulation efficiency works, and also if your DPE is an “old” type, established before the 1/04/2013.

Why DPE is becoming so important for selling or buying your French home?

French buyers are becoming increasingly sensitive to DPE results and do not hesitate to factor a poor energetic classification within the price negotiation. Additionally, the new energetic standard for newly build home, the “RT2012” in place since 1/01/2013, sets up very high standard leading to a decrease by 5 times of the energy consumption (versus and “average” home). All newly built home is likely to be classified within the “A” energetic band (less than 50 KWh/m2 per year) while a home in France is on average in band “E” (231 to 330 KWh/ m2 per year). Therefore, it is likely that the price difference between energy efficient and inefficient homes is going to widen. Additionally, we cannot exclude that within the lifespan of your property investment, more stringent regulatory constraints might appear in relation to compulsory energetic efficiency…If you buy a French property as an investment (“buy to let”), do not forget that a DPE has to be provided to your future tenant, therefore a less energy efficient home might have an impact on your investment yield.

Looking to the possible change happening, e.g. the development of electrical cars, you might also be interested in the potential value of property able to offer renewable energy on their own building or attached land (e.g.: roof sun exposure…). We cannot exclude that a property with good renewable potential, able to offer free energy to your car on top of your house, might gain a potential “bonus” for its valuation.

*The DPE is compulsory for a flat whatever the area in m2, and a house with “gross” area bigger than 50 m2. The DPE is also compulsory for a newly built home. The DPE is not compulsory if there is no heating or if there is only an “open fire” chimney.

**penalty of Euros 37 500, and up to 2 years of imprisonment