Landlords are you checking your EPC rating this spring?

Landlords are your checking your EPC rating this spring?

From 01 April 2018, landlords will no longer be able to agree new lets or renew tenancies for properties with an Energy Performance Certificate (EPC) rating below an E.

This legislation will be extended to all existing tenancies from 01 April 2020.

Landlords are therefore urged to check the EPC ratings of their rental properties and improve the EPC ratings in 2017, to avoid potential problems next year.

What is an EPC?

Energy Performance Certificates (EPCs) are needed when a property is:

  • Built
  • Rented
  • Sold

An EPC must be requested before a property is put on the market to sell or rent.

An EPC contains:

  • Details about a property’s energy use and average energy costs
  • Advice about how to reduce energy use and save money

An EPC provides a property with an energy efficiency rating from A (most energy efficient) to G (least energy efficient) and is valid for 10 years.

Buildings that don’t need an EPC

These include:

  • Places of worship
  • Temporary buildings that will be used less than 2 years
  • Stand-alone buildings with floor space of less than 50 square metres
  • Industrial sites, workshops and non-residential agricultural buildings that don’t use a lot of energy
  • Buildings that are due to be demolished
  • Holiday accommodation that’s rented out for less than 4 months a year or is let under a licence to occupy
  • Some listed buildings
  • Residential buildings intended to be used less than 4 months a year

Scope

The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (SI 2015/962) (MEES Regulations 2015) introduced two important measures:

  • A right for a tenant of a domestic private rented property to make energy efficiency improvements
  • A requirement that a Landlord ensures their domestic and non-domestic private rented property reaches minimum efficiency standards

The MEES Regulations 2015, provides that where the property has an EPC rating below an E (sub-standard), subject to exemptions, a landlord may not:

  • Grant a new tenancy or extend or renew an existing tenancy of a private rented property (both domestic and non-domestic) on or after 1 April 2018
  • Continue to let a domestic private rented property on or after 1 April 2020
  • Continue to let a non-domestic private rented property on or after 1 April 2023

Properties not within the scope

Not all properties are subject to the MEES Regulations 2015, these include:

  • Property that is being sold, rather than let
  • Owner-occupied property

Improving energy efficiency

Improvements that could save the most energy depend on the property, but typical examples include:

  • Insulation (solid wall, cavity wall or loft insulation)
  • Draught-proofing
  • Double glazing windows
  • Low energy lighting
  • Thermostatic valves on radiators

Penalties for non-compliance

Penalties for letting a sub-standard private rented property for less than three months from service of the penalty notice are:

  • Up to £2,000 for domestic private rented property
  • From £5,000 or 10% of rateable value up to £50,000 for non-domestic private rented property
  • A publication penalty

Penalties for letting a sub-standard private rented property for three months or more from service of the penalty notice are:

  • Up to £4,000.00 for domestic private rented property
  • From £10,000 or 20% of rateable value up to £150,000 for non-domestic private rented property
  • A publication penalty

Landlords check your EPC rating this spring

A rental property is one of a landlord’s most important assets.

Landlords are urged to plan ahead and ensure that their rental properties are fit for purpose and compliant with upcoming legislation.