EPC

Energy Efficiency Regulations and what it means for your property

In April 2018, UK law changed and now states that privately rented properties must have a minimum energy performance rating of E. Currently in force for new lets and tenancy renewals, as of 1st April 2020 it will also apply to all existing tenancies. In short, it means that it is now illegal to rent a property that does not have an E EPC minimum. If a property fails to meet the criteria, a penalty of up to £4000 will be required. However, there are some exceptions so we’ve summarised the Energy Efficiency Regulations and what it means for your property.

Energy efficiency improvements

If you are a landlord and have a privately rented property that is rated F or G EPC you are legally required to arrange energy efficiency improvements. This work should be carried out before the property is rented unless the property and landlord has an exemption on the Public Exemptions Register.

The scope of the Regulations

While these regulations apply to most private rented properties, there are some exceptions. However, tenancies under the Rent Acts, properties let in an agricultural occupancy and properties let under an assured tenancy are included in the regulations.

Both flats and houses need a rating of E or higher before being sold or rented. Flats often require individual EPC’s at the point of sale or let. However, non-self-contained units like bedsits don’t require an individual EPC. However, the property that houses the bedsit will require an EPC.

Buildings excluded include:

• Protected buildings, monuments, and most listed buildings

• Temporary buildings with a planned use of 2 years or less

• Residential buildings which will be used less than 4 months of the year

Different types of tenancies

The most common type of tenancy is assured tenancy. This type of let will be included in the regulations. However, not all residential lettings will be assured tenancies. If a property is let anyway other than an assured tenancy, it is not deemed as a domestic property and will not be inside the scope of regulations.

If you are a landlord, it is crucial to determine whether you’ve got a tenancy or license. This is not an easy decision to make and if you’re not sure, take legal advice.

Improvements required

Work is required if a property’s energy rating is less than E. In short, as long as a rating of E is obtained, choice of work is left to the landlord. Plus, there’s nothing stopping you from achieving a higher rating. Properties which do not meet the standards are referred to as sub-standard properties. The landlord must then bring the property up to the correct standard and cannot let the property until the work is done.

A five-year exemption can be applied for if cost-effective work has been completed but the rating remains under E or if the landlord has not received consent from the tenant. Alternatively, if the landlord receives written consent from a suitable qualified person, there is no need for wall insulation to be installed.

Temporary exemptions of six months can apply if someone has recently become a landlord and a guarantor takes over the tenancy. Alternatively, a temporary exemption can also be given if a new lease is created by law. It is important to remember that exemptions only last for five years, after which they have to be reviewed. If they are no longer effective, work must be carried out.

Key Points

• The regulation came into force as of 1 April 2018, and applies to a new tenancy for a new tenant, or a new tenancy for an existing tenant

• From 1st April 2020, the regulations will apply to all privately rented properties

• Local authorities will enforce compliance with the regulations

If you have any questions, get in touch today and speak to one of our experts.