#ExpertView: Tessa's 2018 Legal Changes series - 2. Minimum Energy Efficiency Standards
As you will already know, in most cases you need to have an Energy Performance Certificate for your property:
- You need to give a copy of this to prospective tenants - normally before they sign the tenancy agreement, or risk a fine; and
- If you do not serve this on your tenants, you will be unable to serve a valid section 21 notice until this is done.
However new rules are due to come into force:
- on 1 April 2018 for new tenancies and
- on 1 April 2020 for ALL tenancies
Under these new rules, you will need to have a minimum energy efficiency rating of E or more.
So, you need to check all your properties and see whether an EPC is required, if so what existing rating they have and, if it is F or G, what you need to do to improve it.
NB. If your EPC was done some time ago it may be worth getting it re-done - as the methodologies underpinning the EPC calculations change from time to time - so you may get a different result when you get a new EPC even if the building has not changed.
You can search for an accredited assessor to do your EPC assessment and provide your certificate >> here.
When the regulations apply
The regulations only apply to certain tenancy types (in particular ASTs) and to properties which are required to have an EPC.
Landlords will avoid the penalties where the rating is below E if:
- The landlord has made all the relevant energy efficiency improvements that can be made but this has not been enough to bring the property up to standard (or if there are none that can be made) AND this has been registered on the national PRS Exemptions Register, OR
- A valid exemption applies.
Examples of exemptions include:
- If the recommended improvements cannot be done because the landlord cannot obtain finance
- One of the recommended improvements is wall insulation but this is not suitable for your property (you will need an expert report to prove this)
- If the works require a third-party consent (e.g. from your freeholder or from the tenant who may not allow you to enter to do the works) which has not been provided. Note though that you will need to be able to show that you have made reasonable efforts to obtain the consent
- If the recommended works would devalue the property by more than 5% (again you will need an expert report to confirm this), or
- You have a temporary exemption because you have only just become a landlord and it is not reasonably possible for you to do the works immediately.
If any of these exemptions apply you will need to register them on the National PRS Exemptions Register, before 1 April 2018.
Registering an exemption
At the time of writing, the register is not yet live and is running as a pilot. We are told that you will be able to access it from >> this page.
If your property is covered by the regulations but you qualify for a valid exemption you will need to register this, along with supporting documentation.
Registration will generally give an exemption for five years unless:
- It is an exemption based on lack of third party consent which lasts for 5 years or until consent is granted - whichever is the sooner, or
- It is an exemption on recently becoming a landlord when it will last for six months.
You will need to set up a unique account when registering - no doubt further information will become available nearer the time.
The register will be used by Local Authority Enforcement Officers as part of their work. Limited public access will also be available.
Conclusion
It is very important that Landlords get to grips with this ASAP - as if you have not upgraded your property or if you cannot claim an exemption (and have not registered your exemption on the National PRS Exemptions Register) then, after 1 April 2018, you can be fined.
However, the regulations are not unreasonable and many landlords will be able to claim an exemption. The main thing is to check this out well in advance of the regulations coming into force.
Full information on the new rules can be found on the government guidance documentation which you will find here.
Also, further information on this and other topics can also be found on my Landlord Law Blog at www.landlordlawblog.co.uk .
About the author:
Tessa is a lawyer specialising in landlord & tenant law and runs the popular Landlord Law online service for landlords.
About TDS:
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We provide invaluable training in tenancy deposit protection and disputes for agents and landlords through the TDS Academy as well as joining with MOL to provide the Technical Award in Residential Tenancy Deposits.
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