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Private Landlords: Do you know your obligations relating to Energy Performance Certificates? 

If you do not provide the tenant with an Energy Performance Certificates (EPC) you cannot serve a Section 21 notice to recover possession of the property.   And if your EPC is below minimum standard you cannot legally let your property and face a penalty.   A bill currently before Parliament is due to raise the minimum standard to “C”.

EPCs detail the energy efficiency of a building by way of a rating from ‘A’ to ‘G’ and also contain certain recommendations for improving a building’s performance. Where a building is to be sold or rented out, an EPC must be provided. There are financial penalties for failing to provide an EPC unless an exception applies.

Nearly 40% of the UK’s energy consumption is down to buildings, and with a view to meeting ‘net zero’ by 2050, the Energy Efficiency (Private Rented Property) Regulations 2015 were introduced. There has been a phased implementation of the 2015 ‘MEES’ (minimum energy efficiency standard) Regulations, which have sought first to tackle new tenancies before current ones.

From 1 April 2016, tenants of domestic property have had the right to request consent for energy efficiency improvements which may not be unreasonably refused by the landlord where funding has been available. If consent has not been refused in accordance with the ‘MEES’ Regulations 2015, the tenant has been able to apply to the First Tier Tribunal.

From 1 April 2018, landlords have not been able to lawfully grant new tenancies or renew existing ones for domestic or non-domestic properties if the building does not have EPC rating of ‘E’ or above. From 1 April 2020, landlords have not been able to continue to let domestic privately rented properties with an EPC below ‘E’ (‘F’ or ‘G’), and this will be the case for commercial rented properties as well from 1 April 2023.

A landlord wishing to let a property that does not meet the minimum ‘E’ rating, will have to undertake ‘relevant energy efficiency improvements’, generally those listed on the EPC’s list of recommendations.

The prohibition on letting substandard property does not apply for a number of exemptions, including:

  • where, despite reasonable endeavours, the landlord is unable to obtain any necessary third party consent to carry out the required works;
  • where the required works would devalue the property by more than 5%;
  • temporary exemption under certain grounds that lasts for 6 months; and
  • nothing more to do exemption which applies to where all “relevant energy efficiency improvements” have already been carried out or there are none which can be done.

In any event, there are specific criterias for each exemption and each exemption must be registered on a central register. Moreover, exemptions are personal to landlords and lapse on the sale of the property.

The Local Authority serving the property in question is responsible for enforcing the MEES Regulations 2015 in respect of domestic properties. Penalties for non-compliance mainly comprise fines of up to £5,000 per offending property, though can also include publication of the landlord’s details on a register of non-compliance. Non-payment of the fines could also result in court proceedings with the Local Authority seeking to recover the debt. Penalties can be appealed by landlords within 28 days, though can be a drawn out process with no certainty that the penalty will be withdrawn.

Ultimately, the onus is on landlords to keep properties at or above the ‘E’ standard where required. And that obligation looks set to become more onerous when the Minimum Energy Performance of Buildings (No.2) Bill becomes law.  If the legislation is unchanged, the minimum standard will jump to “C”.  

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