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Vendor’s obligations

In addition to the existing obligations incumbent upon vendors of real estate property in France, as from 1st November 2006 vendors are obliged to have an inspection carried out and to provide purchasers with a report with respect to energy efficiency (diagnostic de performance énergétique).

In Europe, the housing sector is responsible for more than one third of energy consumed.  In recent years environmental concerns have prompted action in the form of a European Directive dated 16th December 2002, the primary objective of which is to foster improvements in energy efficiency to reduce greenhouse gas emissions.  The EU Directive has been implemented in France by a number of laws of application introduced during the course of September and October 2006.

The result is that vendors are now obliged to have their property inspected and provide purchasers with a report giving an estimation of the cost of energy use in the property together with information as to the level of energy consumption and its impact on the greenhouse effect.  The report must be provided at the point of signature of the initial contract.  Vendors will not however be obliged to have any work carried out in the property to improve energy efficiency, as their obligation is one of information only.  The report is valid for ten years.

The production of an energy efficiency report is obligatory for an existing building or part of an existing building for sales carried out as from 1st November 2006, and for a new building or part of a new building for which the date of submission of the application for planning permission is subsequent to 30th June 2007.  The obligation will apply to new leases as from 1st July 2007.

Excluded from the measure are temporary constructions with an intended use of two years or less, independent buildings of which the surface area is 50m or less, buildings of agricultural, artisan or industrial use, historic monuments and listed buildings.  The cost is expected to be in the region of between 150€ and 250€ depending upon the size of the property.

The inspection report indicates the amount of energy actually consumed in the property or an estimation, as well as a classification enabling the consumer to evaluate its performance in terms of energy consumption.  The report also includes recommendations as to how performance can be improved to reduce energy costs and limit greenhouse gas emissions.

Properties are classified according to the annual level of consumption of energy per square metre (kWh/m2pa).  For example, if the total consumption is 12000 kWh per year in a property of 100m2 the energy efficiency is 120 kWh per m2 per year.

There are seven classifications ranging from classes A to G.  Classification in group A denotes that a property is energy efficient, with an annual consumption of primary energy for heating and hot water of less than 51 kilowatts per square metre per year.  Subsequent classifications grade properties in accordance with increasing levels of energy consumption culminating in class G, which refers to properties with consumption equal to or superior to 450 kWh/m2pa.

The report also provides a breakdown between renewable energy and fossil fuels with an estimation of the costs and an indication of the contribution to global warming.  buildings are classified according to the level of annual emissions of greenhouse gases by square metre linked to the consumption of energy (in kgCO2/m2pa).  Again, there are seven classifications ranging from class A, referring to properties with emissions of 5kg of CO2 per square metre per year, considered weak in emissions of greenhouse gases, to class G with emission levels of 80kg and over.  Where the building is fitted with a boiler of a capacity of 20 kilowatts or over an inspection of the boiler is also required.

In France, the average energy efficiency levels are in the region of 200 kWh per m2 per year.  Energy consumption varies according to the type of property, when it was built, and the climatic region.  Recently built properties consume much less than older propertys, where for example heating represents 87% of the consumption of energy as opposed to only 30% in newer more energy efficient constructions.  A recently introduced regulation fixes the consumption for heating of new properties at a maximum of 85 kWh per m2 per year.  Despite measures to improve heat insulation and efficiency of heating systems energy consumption is however increasing, due in part to the increase in surface area of properties in relation to the number of occupants and an increase in general comfort and amenity.

To further encourage energy efficiency the association Effinergie was formed in May 2006 in order to provide a voluntary standard for low energy use in buildings, for which the intention is to put in place3 a certification in 2007.  France will thereby have its own label on the model of that provided by similar associations such as Minergie in Switzerland and Passivhaus in Germany and Austria.  The Passivhaus standard requires for example that buildings must not use more than 15 kWh/m2pa in heating energy and that the total primary energy consumption for heating, hot water and electricity must not exceed 120 kWh/m2pa.

It remains to be seen whether these new measures will achieve results in environmental terms, however narrowing the effects down to the individual level, from the purchaser's standpoint the provision of further information regarding the property can only be positive.

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