Energy Efficiency Regulations – A Basic Guide For Landlords

Who is affected?

Private landlords.

What is affected?

Domestic and non-domestic property in England and Wales which is legally required to have an Energy Performance Certificate (EPC) which has an EPC rating of band F or G.

When does it take effect?

New tenancies granted, or existing tenancies extended or renewed, on or after 1st April 2018. This affects ALL tenancies in existence on or after 1st April 2020. Tenancies are assured, assured shorthold, regulated and agricultural tenancies.

What needs to be done?

Either:

* If the property is exempt – register an exemption on the national PRS Exemptions Register.

* If the property is not exempt – make improvements to the property to raise the EPC rating band to a minimum of E.

How can a property be exempt?

There are six categories of exemption:

1. Where all the ‘relevant energy efficiency improvements’ for the property have been made (or there are none that can be made) and the property remains sub-standard.

2. Where a recommended measure is not a “relevant energy efficiency improvement” because the cost of purchasing and installing it cannot be wholly financed at no cost to the landlord.

3. Where the relevant energy efficiency improvement is wall insulation and expert advice indicates that the measure is not appropriate for the property due to its potential negative impact on the fabric or structure of the property.

4. Where the relevant energy efficiency improvements may require third party consent before they can be installed in a property and the landlord could not obtain one or more necessary consents.

5. Where the landlord has obtained a report advising that the installation of specific energy efficiency measures would reduce the market value of the property, or the building it forms part of, by more than five per cent.

6. Temporary exemption where a person may have become a landlord suddenly and as such it would be inappropriate or unreasonable for them to be required to comply with the Regulations immediately. This type of exemption will last for six months after the date the person became the landlord and will apply from that date.

The funding that a landlord may rely on for the recommended improvements can be from:

* Green Deal Plan

* Energy Company Obligation or similar scheme

* Funding provided by central government or local authority or third party at no cost to the landlord

* A combination of any of the above.

Exemptions register information requirements

The information required for all exemptions is:

* Address of the property;

* Which exemption is being registered;

* Copy of a valid EPC for the property;

Depending which exemption is being registered determines what additional information is required:

Category 1 as referred to above.

* Details of any energy efficiency improvement recommended for the property in a relevant recommendation report (if separate to the relevant EPC), including a report prepared by a surveyor, or a Green Deal Advice Report.

* Details, including date of installation, of all recommended energy efficiency improvements which have been made at the property in compliance with the Regulations.

* Where there are no improvements to be made, a copy of the relevant report to demonstrate this (if separate to the relevant EPC).

Category 2 as referred to above.

* A description of why the landlord has been unable to obtain adequate ‘no cost’ funding.

* Optionally, the landlord may also provide a copy of any evidence on which the landlord relies to demonstrate that they have been unable to access relevant ‘no cost’ funding to fully cover the cost of installing the recommended improvement or improvements.

Note: Evidence of a landlords inability to access relevant ‘no cost’ funding may include a notification from a Green Deal provider advising that no Green Deal finance is available for a recommended measure, or that funding is only available to partially cover the costs.

Category 3 as referred to above.

* A copy of the written opinion of a relevant expert stating that the property cannot be improved to an EPC E rating because a recommended wall insulation measure would have a negative impact on the property (or the building of which it is a part).

Category 4 as referred to above.

* A copy of any correspondence and/or relevant documentation demonstrating that consent for a relevant energy efficiency measure was required and sought, and that this consent was refused, or was granted subject to a condition that the landlord was not reasonably able to comply with.

Note: Where the party who withheld consent was a tenant, the exemption will only remain valid until that tenant’s tenancy ends. When that tenant leaves the property (or after five years, whichever is soonest) the landlord will need to try again to improve the EPC rating of the property, or register another exemption, if applicable.

Category 5 as referred to above.

* A copy of the report prepared by an independent RICS surveyor that provides evidence that the installation of relevant measures would devalue the property by more than 5%.

Category 6 as referred to above.

* The date on which they became the landlord for the property, and

* the circumstances under which they became the landlord (any of the circumstances set out at section 3.1.3 of this guidance).

Note: Where a person wishes to register an exemption upon recently becoming a landlord, the exemption will last for a period of six months.

What should landlords do now?

1. Check the current energy efficiency rating band on the most recent EPC for the property. If you do not have a copy of the most recent EPC, download a (free) copy from the EPC Register here www.epcregister.com. If you do not have have a copy of the most recent EPC and there is no valid copy in the EPC Register, commission an energy assessment (and EPC) with a Domestic Energy Assessor (DEA) found here https://www.epcregister.com/searchAssessor.html

2. If the property has the minimum EPC rating band of E or above, no further action is required. If the property has an EPC rating band of F or G, contact the Energy Savings Advice Service on 0300 123 1234 for advice and assistance on funding for the energy efficiency improvements recommended in the EPC.

3. If one of the exemptions listed above applies, register an exemption on the national PRS Exemptions Register by sending an e-mail to the BEIS minimum standards team at PRSregisteraccess@beis.gov.uk

If you do register an exemption on the national PRS Exemptions Register you will need to repeat this every 5 years for exemption categories 1-5 and 6 months for exemption category 6 so put a date in your diary.

Further Reading

THE DOMESTIC PRIVATE RENTED PROPERTY MINIMUM STANDARD

THE NON-DOMESTIC PRIVATE RENTED PROPERTY MINIMUM STANDARD

PainSmith Solicitors Energy Performance – funding in detail

PainSmith Solicitors Energy Performance – funding in detail continued