1. Do EPCs need to be provided on sales and lettings and if so, are there any statutory minimum requirements?

Yes, EPCs need to be provided for sales as well as lettings, however, there are some exceptions (e.g sales under expropriation procedure, sales in bankruptcy or enforcement procedures, lettings shorter than 1 year etc.). There is no obligation to ensure a minimum energy performance of a building in order to obtain an EPC. 

2. Is there any legislation requiring new or existing buildings to satisfy ESG requirements?

Yes, when constructing a new building a developer must guarantee consistency of the construction plan with the relevant EU and national legislation. Challenges encompass adherence to standards laid down by laws (e.g the Spatial Management Act (ZUreP-3), the Environmental Protection Act (ZVO), the Building Act (GZ-1) etc.) and other implementing documents. Developers must navigate social compliance, safety regulations, and sustainable practices with respect to ESG laws. Striking a balance between these factors, costs, and property performance is imperative. For additional information kindly see comprehensive Expert Guide on ESG in Real Estate (Expert Guide on ESG in Real Estate in Slovenia (cms.law)

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 rare but are more likely to be included in commercial than in residential lease agreements. The inclusion of green lease provisions in lease agreements is not a legal requirement and their inclusion is market driven. In general, green lease provisions include the tenant's obligation to separate waste collection, the landlord's commitment to allocate a certain CAPEX to energy renovation and the obligation of installation of smart electricity meters.

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?

There is no publicly available information regarding green lease drafting by institutional investors and banks, nor there exists a market standard approach to green lease drafting. Our due diligence reports do not highlight the absence of green lease provisions.

5. How are green lease provisions enforced?

In the event of a breach of the green lease clause, termination of the lease agreement is a possible consequence. However, green lease provisions are often drafted as aspirations and objectives rather than as enforceable obligations. It would therefore be difficult to prove a violation of such a provision, particularly given the often vague nature of such provisions. Even if a breach could be proven (and there was no contractual penalty agreed beforehand for breach of such a provision), it would be difficult to establish the damages for the breach. As a result, green lease provisions remain largely unenforced.

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?

There are no statutory obligations to obtain commercial certificates. Building certification in Slovenia is voluntary, unregulated, market-driven and not widespread. The most common voluntary sustainability certificate is DGNB, followed by LEED, HQE and BREEAM. The requirement for certification is sometimes present in construction and design contracts. Commercial certificates are less frequently referenced in lease agreements. When they are mentioned, they are typically included in introductory clauses and serve as commitment by the landlord to obtain or ensure compliance with the same standards as those applicable to the certificates.

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)?

The Act on the siting of installations for generation of electricity from renewable energy sources (ZUNPEOVE) prescribes an obligation to install photovoltaic power plants on all new buildings with a roof area of 1,000 sqm or more (and, after lapse of a transitional period, also on existing buildings with a roof area of more than 1,700 sqm), unless this is not possible due to the type and location of the building or other conditions, such as the possibility of connection to the electricity grid. 

Installation of rooftop photovoltaic system may require a construction permit, depending on the power capacity, placement, and mode of connection to the grid. For each alternative supply system, a permit for connection to the grid must also be obtained. If a rooftop photovoltaic system with a rated capacity greater than 10 MW is connected to the public grid, obtaining a final energy permit is also required. Lastly, connection to the grid requires a connection consent issued by the electricity distribution companies authorised by the distribution system operator.

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?

Yes, such regulations exist. With regard to new buildings / refurbishments, these concerns will be addressed in the context of cantonal building permits. Soil protection measures can include, for example, documentation requirements, the use of clean and diverse soil material etc. They are enforced by the building permit otherwise not being granted or being withdrawn. Non-compliance can also result in administrative fines.