CHANGES TO EPC LEGISLATION FROM APRIL 2018

EPC – The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 are designed to tackle the least energy-efficient properties in England and Wales – those rated F or G on their Energy Performance Certificate (EPC). The Regulations establish a minimum standard for both domestic and non-domestic privately rented property, affecting new tenancies from 1 April 2018. This guidance relates to domestic property only.  Corresponding guidance to landlords of non-domestic property can be found on the Government’s website www.gov.uk

The current domestic regulations are based on a principle of ‘no cost to the landlord’, this means that landlords of F or G rated homes will only be required to make improvements to these properties where they can do so entirely using third party finance from one or more sources.

The Government Has published a document that provides guidance and advice on the new Regulations including:

• Scope of the regulations: the steps a landlord should take to determine whether their property is covered by the regulations, and the steps they should take to ensure their property complies with the minimum level of energy efficiency.
• The Minimum Level of Energy Efficiency: The Regulations set out the minimum level of energy efficiency for private rented property in England and Wales (does not apply to Scotland and Northern Ireland). In relation to the domestic private rented sector the minimum level is an energy performance certificate (EPC) rating of band E. Landlords who are installing relevant energy efficiency improvements may, of course, aim above and beyond this current requirement if they wish. It has been obligatory to supply an EPC for a rented property since 2007.
• Benefits of Energy Efficiency: EPC F and G rated properties waste energy. They impose unnecessary cost on tenants and the wider economy, and they contribute to avoidable greenhouse gas emissions.  Increasing the energy efficiency of our domestic rental stock can help   manage the energy costs of tenants, including some of the most vulnerable; improve the condition of properties and help reduce maintenance costs; smooth seasonal peaks in energy demand, and thereby increase our energy security and reduce greenhouse gas emissions at relatively low cost.
• Tenants and Landlords: The Regulations are intended to ensure that those tenants who most need more efficient homes, particularly vulnerable people, are able to enjoy a much better living environment and lower energy bills.  Although newly built homes in the private rented sector tend to have higher energy-efficiency ratings than the average, there remains a stock of older, less modern properties, and many of these have poor energy efficiency and are difficult and costly to heat. These less efficient properties result in higher tenant energy bills, and for many, the likelihood of living in fuel poverty.  Living in private rented accommodation significantly increases the likelihood of a household being fuel poor, so much so that around a third of all fuel-poor households in England live in the private rented sector, despite the sector accounting for only around a fifth of all households in England and a seventh of the households in Wales.
• The affected tenancy types are:
  • • An assured tenancy (including an assured short hold tenancy) defined in the Housing Act 1988.  ?
    • A regulated tenancy defined in the Rent Act 1977;
    • An agricultural tenancy as set out in the Energy Efficiency (Domestic Private Rented Property) Order 2015 (see paragraph 1.1.3 for more details).
    • The minimum standards do not apply in the social housing sector.
• Benefits to Tenants and Landlords: While tenants will benefit in terms of reduced energy bills, or through increased warmth, comfort and the associated health benefits, the energy efficiency improvements also benefit landlords. When the Regulations were being designed, a number of landlords’ associations identified a range of benefits for landlords including increased tenant satisfaction and reduced void periods; reduced long-term property maintenance costs; and making properties more attractive and easier to let.
• Relevant improvements: how a landlord can identify appropriate energy efficiency improvements for their property.  These may include replacing windows, installing loft insulation, cavity wall insulation and taking measures to exclude draughts.
• Costs to improve and cost effectiveness: how a landlord can calculate whether particular improvements would be cost effective to install. The Green Deal, which was introduced in 2013, is one of the ‘financial arrangements’ that landlords of domestic properties can use to fund improvements under the Regulations.  Where available, Green Deal finance will enable landlords to cover some or all of the costs of compliance through the Pay As You Save mechanism.  Landlords can apply for a Green Deal loan by contacting their local Green Deal Provider (details can be found on the Green Deal Finance Company website www.gdfc.co.uk) or through the enquiry form on the same Green Deal Finance Company website. Due to the varied nature and availability of local funding opportunities, landlords will need to investigate the availability of funding for the area where their property or properties are located.  For independent advice on availability of funding for making energy efficiency improvements, landlords should contact the Energy Saving Advice Service on 0300 123 1234.
• In summary:
  • • There are no specified materials or improvement measures; a landlord is free to do whatever they like with their property so long as the EPC rating can be raised to meet the minimum energy efficiency standard. The most assessable ready source of advice would be the recommended measures section on EPC for the property, but landlords can seek advice from other suitably qualified experts if they wish.
    • A Landlord is only required to make improvements to an F or G rated property to meet the minimum standard if they can do so at no cost to themselves. No cost funding can come from a range of sources, primarily (but not limited to): Green Deal Finance, ECO help to heat funding, Local Authorities home energy efficiency grants.
• Exemptions and exclusions: the exemptions framework and the steps a landlord should take to register a valid exemption. Landlords of domestic property for which an EPC is not a legal requirement are not bound by the prohibition on letting sub-standard property.
• Enforcement: Local authorities will enforce compliance with the domestic minimum level of energy efficiency. They may check whether a property meets the minimum level of energy efficiency, and may issue a compliance notice requesting information where it appears to them that a property has been let in breach of the Regulations (or an invalid exemption has been registered in respect of it).  Where a local authority is satisfied that a property has been let in breach of the Regulations it may serve a notice on the landlord imposing financial penalties up to £5,000. The authority may also publish details of the breach on the national PRS Exemptions Register.  The landlord may ask the Local authority to review the penalty notice and, if the penalty is upheld on review, the landlord may then appeal the penalty notice to the First-tier Tribunal.  A local authority may also serve a penalty notice for the lodging of false information on the Exemptions Register.
• The appeals framework: landlord appeals will be heard by the First-tier Tribunal, part of the court system administered by Her Majesty’s Courts and Tribunals Service; the guidance discusses the steps a landlord will need to take to lodge an appeal, and how that process will be run.

Full details available on the Government website www.gov.uk The Private Rented Property minimum standard – landlord guidance documents

With thanks to ARLA website www.arla.co.uk and the UK Government website  www.gov.uk for the above information.