Energy Performance Certificates and Property Value: The Legal Impact of Sustainability Ratings

Energy Performance Certificates (EPCs) have become an indispensable element of real estate transactions in recent years. In 2026, the EPC is no longer merely “paperwork alongside the sale” but a factor that shapes buyer decisions, financing conditions, and contractual risk allocation. Below, we examine the applicable legal framework, the actual liability rules, and the contractual tools available.

Legal Foundations of Energy Performance Certificates

The Applicable Regulatory Framework

The legal framework for energy performance certification comprises:

• Government Decree 176/2008 (VI.30.) — on the energy performance certification of buildings (transposing the EU Energy Performance of Buildings Directive into Hungarian law)
• TNM Decree 7/2006 (V.24.) — on determining the energy performance characteristics of buildings (technical methodology)
• EPBD Directive — Directive (EU) 2024/1275 on the energy performance of buildings (the recast Energy Performance of Buildings Directive)

Under Section 7 of Government Decree 176/2008, the seller — or property owner — must provide an Energy Performance Certificate to the buyer upon sale. Selling without a certificate constitutes a regulatory violation.

The Certificate Issuer: The Certified Energy Expert

A crucial clarification: the EPC is not issued by the seller but by a certified energy expert holding the necessary qualifications. The expert classifies the property on a scale from A++ to H based on an examination of the building’s technical characteristics.

Liability for the certificate’s content — its accuracy and the correctness of calculations — rests primarily with the certifying expert, not the seller. This liability structure differs significantly from what popular discourse suggests.

Warranty Liability and the Energy Performance Certificate

The Warranty System

Sections 6:157–6:178 of the Hungarian Civil Code (Ptk.) regulate warranty for defects (kellékszavatosság). The seller is liable for defects existing at the time of performance (Section 6:159). A defect exists when the service does not conform to the characteristics specified in the contract or legislation at the time of delivery.

Seller’s Liability: Not ‘Strict Liability’ for EPC Content

The claim that sellers bear “strict liability” for the “authenticity” of the energy certificate is inaccurate and misleading:

1. The ‘objective’ nature of warranty liability — warranty liability is indeed fault-independent (objective) in the sense that the seller need not have known about the defect. If performance is defective, the warranty claim exists. However, this relates to the property’s actual characteristics, not the certificate’s content as such.

2. Distinguishing seller and expert liability:

   • The seller is responsible for delivering the property with the characteristics stipulated in the contract and required by law — including provision of the EPC
   • If the property’s actual energy performance differs from what is certified and this causes loss to the buyer, the question is whether the defect lies in the performance (i.e., the property is worse than the buyer could reasonably expect based on the contract)
   • If the seller in good faith handed over a certificate issued in compliance with regulatory requirements, and the discrepancy results from the certifying expert’s error, warranty liability may exist against the seller, but the seller may have a recourse claim against the certifying expert (damages under Section 6:519 Ptk.)

3. The ‘seller is not an expert’ defence — courts indeed do not accept the bare defence that the seller “was not an expert,” but this does not mean “strict liability” for the certificate’s content. The seller’s obligation is to provide a valid, authentic certificate and to fulfil their disclosure obligation (Section 6:62 Ptk.) — but the certifying expert bears responsibility for the certificate’s substantive accuracy.

Buyer’s Remedies

If, after purchase, the buyer discovers that the property’s energy characteristics are substantially worse than certified, the following remedies are available:

1. Warranty claims (Section 6:159 Ptk.):

   • Repair or replacement — typically irrelevant for immovable property
   • Price reduction (Section 6:159(2)(b)) — if the discrepancy results in quantifiable diminution of value
   • Withdrawal (Section 6:159(2)(b)) — only in cases of material breach (Section 6:140 Ptk.)

2. Damages (Section 6:174 Ptk.) — compensation for pecuniary and non-pecuniary loss arising from defective performance

3. Fraudulent misrepresentation (Section 6:91 Ptk.) — if the seller knowingly provided false information about the certificate’s content, the contract may be challenged on grounds of fraud

The Disclosure Obligation

The disclosure obligation under Section 6:62 Ptk. is particularly important in real estate transactions. The seller must inform the buyer of the property’s material characteristics, including its energy performance. If the seller knows that the property’s actual energy consumption substantially deviates from the certified values — for example, based on prior utility bills — and conceals this, they breach their disclosure obligation, which may ground an independent damages claim.

Impact on Financing: The MNB Green Recommendation

The MNB’s Green Recommendation

The Magyar Nemzeti Bank (MNB — Hungarian National Bank) has issued a Green Recommendation for financial institutions encouraging green lending: it recommends supporting the financing of properties with better energy ratings on more favourable terms (lower interest rates, preferential spreads).

Important clarifications:

1. The MNB Recommendation is not legislation — it is not mandatory but rather a comply or explain regulatory instrument. Financial institutions apply it voluntarily, though supervisory expectations provide a strong incentive.

2. Not a ‘hidden encumbrance’ — less favourable lending conditions do not constitute an encumbrance on the property (Section 5:165 Ptk.). The concept of encumbrance encompasses rights registered in the land registry (mortgages, usufruct, easements, etc.). Financing conditions pertain to the loan agreement, not the property’s characteristics.

3. The impact is real but nuanced — financing for properties with poorer energy ratings may indeed be more expensive (higher interest, lower loan-to-value ratio — LTV), but this is neither automatic nor “drastic”: individual banks implement the MNB recommendation to varying degrees. The “below category D” distinction is not a universal threshold — each financial institution’s internal policies determine the preferred categories.

Contractual Risk Management: Energy Renovation Clauses

Contractual Practice, Not a Statutory Term

The notion of a standardised “Green Renovation Clause” is not a codified legal institution or statutory requirement. What exists in practice is this: within the framework of freedom of contract (Section 6:59 Ptk.), the parties may freely stipulate in the purchase agreement that the buyer will allocate part of the purchase price to energy modernisation.

Such contractual arrangements may take the form of:

• Purchase price retention — the buyer places part of the purchase price in escrow until the renovation is complete (attorney escrow, Section 6:367 Ptk.)
• Conditional price reduction — the seller accepts a lower purchase price, taking into account the necessary renovation costs
• Warranty waiver limitations — the parties may agree that the buyer waives warranty claims relating to energy characteristics (Section 6:162 Ptk.), but this must be an individually negotiated term, not a general term and condition, and cannot extend to defects caused by the seller’s intentional or grossly negligent conduct

Limitations on Warranty Waivers

Section 6:162 Ptk. clearly limits the validity of warranty waivers:

• In consumer contracts, waiver of warranty rights is void
• In non-consumer transactions, the waiver is valid but does not exempt the seller if they knew about the defect and concealed it, or if the defect results from the seller’s intentional conduct

Impact of the EPBD Recast

The EPBD recast (Directive (EU) 2024/1275) reinforces the EPC’s role in the real estate market. The directive requires:

• Member States to prepare National Building Renovation Plans
• Minimum requirements to be set for the worst-performing buildings
• Expansion of EPC information content (renovation recommendations, cost estimates)
• Improvement of certificate availability and accessibility (digital certificates, central registries)

The transposition deadline falls in the second half of 2026, meaning implementation is ongoing — the impact of certain provisions is already felt in the market, but full transposition has not yet concluded.

Practical Advice

For Sellers

1. Provide a valid EPC — selling without a certificate as required by Government Decree 176/2008 constitutes a regulatory violation
2. Choose a reputable certifying expert — while the expert bears liability for content errors, the seller’s disclosure obligation persists
3. Disclose actual energy consumption — if utility bills substantially deviate from the certified values, the buyer must be informed (Section 6:62 Ptk.)
4. Consider price adjustments — if the property’s energy rating is unfavourable, the market price will reflect this

For Buyers

1. Request the EPC before signing — this is a statutory obligation, not a courtesy
2. Independent verification — if the property’s actual energy consumption deviates from the certified values, engage an independent expert to document the discrepancy
3. Contractual protection — have the energy rating recorded in the purchase agreement as a material contractual characteristic; any deviation establishes a warranty claim
4. Clarify financing conditions — request advance information from the lender about how the energy rating affects loan terms

For Certifying Experts

1. Heightened duty of care — the expert bears damages liability for content errors in the certificate under Section 6:519 Ptk.
2. Professional liability insurance — indispensable for covering claims arising from incorrect certificates
3. Documentation of measurement methodology — in the event of litigation, the expert must demonstrate that the methodology prescribed by TNM Decree 7/2006 was applied

In 2026, the Energy Performance Certificate is no longer merely an administrative obligation but a factor that materially influences property value and marketability. The legal assessment, however, is more complex than public discourse suggests: the respective liabilities of the seller, the certifying expert, and the lender must be carefully delineated, with warranty rules and contractual risk management applied in concert.