In view of the ultimate goal of carbon-neutral buildings, the Flemish Government is stepping up its efforts: in addition to the existing EPC- and renovation obligation in case of a transfer or a lease, every owner, holder of a building right or holder of a long term lease right on a non-residential unit should in the future have an energy performance certificate for non-residential units (“EPC NR”) and achieve a minimum energy label E.

1.1. Obligation to continuously have a valid EPC NR

Existing obligation in case of transfer or lease

Since 2023, an EPC NR should be available in case of a notarial transfer of full ownership, the establishment or transfer of a building right or a long-term lease right and the lease regarding a large building unit with a non-residential main destination. This includes retail stores, office buildings, horeca, hospitals, etc. with a useable floor area of 500 m² or more.^[1] Industrial, agricultural, and residential buildings are not considered as non-residential units.

New obligation: continuous

Since January 1^st of 2024 all large non-residential building units qualifying as public buildings or buildings used by public authorities (without any transfer or lease taking place) must continuously have an EPC NR. The same obligation will apply as of January 1^st of 2025 for all other large non-residential building units with a usable floor area > 1000 m² and as of January 1^st of 2026 for all large non-residential building units with a usable floor area between 500 m² and 1000 m². This obligation lies with the owner of the unit, the holder of a building right on the unit or the holder of a long-term lease right on the unit.

Sanction

The non-compliance with the required EPC NR can be sanctioned with an administrative fine of up to EUR 5.000. Furthermore, the Flemish Agency for Energy and Climate may impose a new deadline by which the required EPC NR must be obtained.

Practical

Appoint in time a recognised energy expert since preparing the required EPC NR takes some time. The cost depends on the size and the complexity of the building. An EPC NR is in principle valid for a period of 5 years and must be renewed thereafter.

If you still have a valid EPC Construction (“EPC Bouw”) for a building, you are covered for the first 10 years after the entry into use of the unit. If you demolish the unit completely, you are exempt from this obligation, provided you notify the Flemish Agency for Energy and Climate in time and carry out the demolition works within 5 years as of the grant of the integrated permit for these works.

1.2. Minimum energy label by 2028 (public buildings) or 2030

Obligation for large non-residential units

Once the obliged EPC NR has been prepared, sanctions will apply if the renovation works to achieve at least an energy label E are not carried out in time. For the large non-residential units qualifying as public buildings and buildings used by public authorities this minimum energy label E is required from January 1^st of 2028. Other large non-residential building units must achieve the minimum energy label E by January 1^st of 2030. Even without a transfer of the building (noted in a previous contribution on the renovation obligation in case of a transfer), the owner, holder of a building right or holder of a long term lease right of an energy-consuming large non-residential unit must timely renovate to have at least an EPC NR with energy label E. If you still have a valid EPC Construction, you are settled for the first 10 years after the entry into use of the building, provided that the EPC shows compliance with the energy label.

Obligation for small non-residential units

Small non-residential buildings and buildings units (eg. a medical practice, a neighbourhood shop, a café, etc.) will also be required to possess a valid EPC for small non-residential units (“EPC kNR”) with a minimum energy label E (for open and semi-open buildings) or D (when the unit is in a building with multiple units or when it is a closed building) starting January 1^st of 2030. This minimum label will become stricter from 2035.

If you demolish the whole unit, both large and small non-residential units are exempt from the obligation to achieve a minimum energy label provided you notify to the VEKA in time and carry out the demolition works within 5 years as of the grant of the integrated permit for these works.

Sanction

In case of non-compliance with the label obligation the Flemish Agency for Energy and Climate can impose an administrative fine of up to EUR 200.000 and the EPC with the required label must still be obtained. The sanction is imposed on the owner or on the holder of a building right on the unit or on the holder of long term lease right on the unit.

Practical

Make sure that you, as the owner, the holder of the building right or the holder of the long term lease right, knows the energy label of the non-residential unit concerned so that you can timely implement the necessary energy-saving measures to comply with this obligation and have a new EPC to prove the achievement of this energy label.

For more information on this obligation, you can contact the KPMG Law real estate team.

In addition to the obligation for non-residential building units to achieve a minimum energy label by 2030, the same obligation applies for residential building units. At the end of 2023, the Flemish Government approved a decision introducing a new version of the technical report used to assess the quality of dwellings. This technical report is used to evaluate a dwelling against the minimum Flemish housing quality standards. Based on this report, the mayor can or cannot issue a conformity certificate for the dwelling. This conformity certificate can be required to lease a dwelling in some municipalities.

With this new technical report, the Flemish Government adds an energy standard to the minimum housing quality standards. From January 1^st of 2030 an open and semi-open residential building will have to possess a minimum energy label E. Every 5 years this minimum required energy label for these dwellings becomes stricter whereas from January 1^st of 2035 the energy label D is required, and from January 1^st of 2040 an energy label C.

For appartements and closed residential buildings the minimum required energy label is stringer compared to the open and semi-open buildings because of their smaller heat loss surface area. Appartements and closed residential buildings already need to have a minimum energy label D from January 1^st of 2030, and an energy label C from January 1^st of 2035.

The energy label of a dwelling can be known by means of an energy performance certificate. Indirectly, this regulation thus imposes an obligation to prepare in any case an energy performance certificate.

Sanction

The non-compliance of a dwelling on the mentioned dates with the minimum energy label qualifies as a category II defect on the technical report. A category II defect means the dwelling has a serious deficiency that seriously impacts the living conditions but does not pose an immediate danger to the safety or health of the resident. A lease agreement for a dwelling that does not meet the minimum living quality standards, including the minimum energy label starting from 2030, can be declared void. A conformity certificate cannot be delivered for such dwellings and the mayor can also declare these dwellings unsuitable.

Practical

Make sure you are aware of the current energy label of your dwelling. This way, you can take the necessary energy-saving measures to comply with the minimum energy label.

In addition to the EPC- and renovation obligation to ultimately achieve carbon-neutral buildings (noted in previous contributions on energy performance certificates and minimum energy label), the Flemish Government also imposes several obligations to reduce vehicle emissions. One of these measures is the obligation to install a minimum amount of charging stations or charging infrastructure for new and extensively renovated buildings for which the integrated permit was applied for starting March 11^th of 2021.

From January 1^st of 2025 also existing buildings not used for residential purposes with over 20 parking spaces must install at least 2 charging points with a normal or high power. Existing residential buildings are under no obligation to provide a minimum number of charging points. As the owner, the holder of a building right or the holder of a long term right on an existing building not used for residential purposes with more than 20 parking spaces, you must have at least 2 charging points for electric vehicles installed by January 1^st of 2025.

Sanction

The Flemish Agency for Energy and Climate can impose an administrative fine of up to EUR 2.000 per missing charging point to the owner or, if applicable, the holder of the building right or the holder of the long-term lease right if the charging station obligation is not met.

Does your building in the Flemish Region have an EAN consumption point where more than 1 gigawatt-hour electricity per year was consumed from the grid in 2021, you must have solar panels installed by June 30^th of 2025. Initially a peak capacity of at least 12,5 watts per m² of horizontal roof area is sufficient, but this will gradually increase to at least 25 watts per m² by January 1^st of 2035 or later depending on the year this threshold was exceeded. If a public entity is the only owner, holder of a building right or holder of a long-term lease right, this obligation applies as soon as more than 250 megawatt-hour of electricity per year has been consumed from an EAN consumption point in 2021.

If you exceed the threshold of 1 gigawatt-hour electricity per year after 2021, the term to comply with the solar panel obligation shifts to January 1^st of the fourth calendar year following the calendar year in which the threshold was exceeded. For example, if you first exceed the threshold in 2022, you need a peak capacity of at least 12,5 watts per m² of horizontal roof area installed by ultimately January 1^st of 2026.

The obligation to install the solar panels is the responsibility of the owner, the holder of the building right or the holder of long-term lease right on the building connected to the relevant EAN consumption point. If you do not comply with this obligation, the Flemish Agency for Energy and Climate can impose a fine of up to EUR 400 per kilowattpeak capacity missing. The missing capacity must be operational within 2 years to avoid incurring a new fine.