- Do EPCs need to be provided on sales and lettings and if so, are there any statutory minimum requirements?
- Is there any legislation requiring new or existing buildings to satisfy ESG requirements?
- How widespread are green lease provisions? Are they regulated or market driven? What areas do green leases commonly cover? Do they apply to both residential and commercial leases?
- What do institutional investors and banks/other financing institutions require in terms of the green lease drafting? Is there any market standard approach to green lease drafting? Do you report on the lack of any green lease provisions in your due diligence reports on an acquisition or refinancing?
- How are green lease provisions enforced?
- How widespread is the certification of buildings (e.g. LEED, BREEAM, NABERS, WELL etc.)? Are they regulated or market driven? How is this documented between the Landlord and Tenant?
- Are there any additional regulatory requirements that need to be met or contractual provisions that need to be considered regarding the installation of alternative energy supply systems (e.g. rooftop photovoltaic systems)?
- Are there any regulations relating to soil artificialisation or other biodiversity concerns which impact on new builds and/or refurbishments? How are they enforced?
jurisdiction
1. Do EPCs need to be provided on sales and lettings and if so, are there any statutory minimum requirements?
Yes, Slovak law requires the owner of the property to provide and hand over the energy certificate upon sale of the property. The owner is also obligated to hand over a verified copy of the EPC to the lessee when letting the property. New properties built after 1/1/2016 require a minimum rating of A1.
2. Is there any legislation requiring new or existing buildings to satisfy ESG requirements?
There are no ESG laws as of yet, the legislation concerning the energy performance of buildings bears the name Act on energy performance of buildings.
3. How widespread are green lease provisions? Are they regulated or market driven? What areas do green leases commonly cover? Do they apply to both residential and commercial leases?
Green lease provisions are a growing trend in the market. However, the practice depends on the parties and their willingness to enter into such agreements. They are almost exclusively market driven with respect to commercial space. Green lease provisions applicable to residential leases are not a common market practice.
4. What do institutional investors and banks/other financing institutions require in terms of the green lease drafting? Is there any market standard approach to green lease drafting? Do you report on the lack of any green lease provisions in your due diligence reports on an acquisition or refinancing?
Around two-thirds of commercial banks in CEE cite ESG factors as important for real estate financing. In this context, around a quarter have experience of refusing financing due to ESG issues. However, the practice in Slovakia is at an early stage and the individual approach of banks may vary depending on their business model and group affiliation. In addition, Slovakia is subject to secondary EU legislation and broader regulatory trends on the ESG side, such as the EU taxonomy or SFDR. This has a direct impact on financing opportunities.
5. How are green lease provisions enforced?
At the time of the writing green lease provisions are only enforced between the parties to the contract.
6. How widespread is the certification of buildings (e.g. LEED, BREEAM, NABERS, WELL etc.)? Are they regulated or market driven? How is this documented between the Landlord and Tenant?
According to a recent study, of 2.1 million square feet of office space, 41% of the total office space in Bratislava is green-certified. However, the market in Bratislava differs significantly from other neighbouring markets. Otherwise, certification is both mandatory and market driven, where buildings must be certified (energy performance) according to the law.
7. Are there any additional regulatory requirements that need to be met or contractual provisions that need to be considered regarding the installation of alternative energy supply systems (e.g. rooftop photovoltaic systems)?
Any arrangement would depend on the nature of the source, whether on-grid or off-grid, or whether it is a local source within the meaning of the Energy Regulatory Framework, or whether the electricity is generated by a community. In any case, a tenant may enter into an agreement with the landlord to secure its own source of energy.
8. Are there any regulations relating to soil artificialisation or other biodiversity concerns which impact on new builds and/or refurbishments? How are they enforced?
There is a general framework for soil protection/biodiversity and Slovakia is subject to EU secondary environmental legislation in this area. However, the requirements and enforcement are fragmented as they are governed by a variety of legal regimes.
