From 1st April 2020, landlords must ensure the Energy Performance Certificates for their lets meet a new standard. This is for new and existing tenancies.
On 1st April 2018, it became a legal requirement for residential landlords to ensure their Energy Performance Certificates (EPCs) have a minimum rating of E. The regulations initially only applied for a new tenancy to a new tenant and a new tenancy to an existing tenant. Now, this law has been extended.
An EPC is needed whenever a property is built, sold or rented. All landlords must order an Energy Performance Certificate for potential buyers or tenants before marketing their properties to sell or let.
What does an EPC contain?
An EPC includes information about a property’s energy use and typical energy costs. It also contains recommendations about how to reduce energy usage and save money.
It assigns the property an energy efficiency rating from A (most efficient) to G (least efficient). This is valid for ten years.
REMEMBER: You can be fined if you don’t get an EPC when you need one. The fixed penalty is £200 per dwelling.
How do I get an Energy Performance Certificate?
You must find an accredited assessor to evaluate your property and produce the certificate.
Landlords with properties in England, Wales and Northern Ireland should look here: https://www.epcregister.com/searchAssessor.html
Those with properties in Scotland can find an assessor here: https://www.scottishepcregister.org.uk/assessorsearch
When is an Energy Performance Certificate required?
EPCs are required as follows for these dwellings:
- Individual house/dwelling (e.g. a self-contained property with its own kitchen/bathroom facilities)
In this instance, one EPC is required for the dwelling.
- Self-contained flats (e.g. each behind its own front door with its own kitchen/bathroom facilities)
One EPC per flat will be needed.
- Bedsits or room lets where there is a shared kitchen, toilet and/or bathroom (e.g. a property where each room has its own tenancy agreement)
No EPC is required.
- Shared flats/houses (e.g. a letting of a whole flat or house to students/young professionals etc. on a single tenancy agreement)
One EPC for the whole house is required.
- Mixed self-contained and non-self-contained accommodation
One EPC for each self-contained flat/unit, but no EPC for the remainder of the property.
- A room in a hall of residence or hostel
No EPC is required.
Energy Performance Certificates and Section 21 notices
As of 1st October 2015, landlords must provide an EPC to tenants before issuing a Section 21 notice to evict them.
Legislation states that an EPC must be given to the person who becomes the tenant. This must be free of charge.
Tenants’ rights to request energy efficiency improvements
As of 1st April 2016, tenants can request consent from their landlords to conduct energy efficiency improvements in their properties. The landlord cannot unreasonably refuse content.
However, it’s the responsibility of the tenant to ensure that the works are funded. The intention is that no upfront costs should fall on the landlord unless the landlord wishes to contribute.
Future minimum energy efficiency standards in the UK
- From 1st April 2023, it will be a legal requirement for all let properties to meet this standard. This is even if a tenancy agreement is already in place and includes both domestic and non-domestic lets.
- From 2025, it is believed that the minimum requirement will be raised to D.
Research from the UK Green Building Council estimates it will cost on average £1,400 to improve a property. This is to take it from an F or G to a minimum E standard.
As of April 2019, landlords are required to pay up to £3,500 plus VAT for any necessary improvements to their property.
If these improvements will cost more than that, a landlord may be able to register for an exemption.
It is illegal to let a property that breaches this EPC requirement. Upgrades must be made to improve the rating unless there is an applicable exemption. This includes the following circumstances:
- Such work would devalue the property by 5% or more
- Recommended work has been carried out but the rating did not improve
- The mortgage lender will not approve the recommended upgrades
- The building is listed and the upgrades would ‘unacceptably alter’ property’s character or appearance
If you believe your let falls into one of these categories, you can register it on the PRS Exemptions Register.
Penalties for non-compliance
If you fail to meet these regulations, a fine of up to £5,000 could be imposed for any breaches.
Disclaimer: The opinions and views expressed in the above article are those of the author only and are for guidance purposes only. The author disclaims any liability for reliance upon those opinions and would encourage readers to rely upon more than one source before making a decision based on the information.