From the 1st April 2016 all domestic tenants are given the right to request energy efficiency improvements to their properties. From 1st April 2018, all private rental properties must achieve an energy efficiency rating of at least E on their Energy Performance Certificate (EPC).
Initially, the regulations will only apply on the granting of a new tenancy to a new or existing tenant. From 2020 the regulations will apply to ALL privately rented property which are required to have an EPC.
Before 1st April 2018 landlords are not expected to improve their property if it means incurring an upfront cost. However, residential tenants in properties let under a long term assured or regulated tenancies have the right to request energy efficiency improvements to their properties.
An EPC is already required to let or market a property legally, but the new laws around Minimum Energy Efficiency Standards (MEES) mean that an EPC of rating F and G is not sufficient for compliance after 1st April 2018. If your property does not meet the minimum standard, you cannot let or market that property within the law, and rent reviews could also be affected.
Penalties for non-compliance
If a tenant considers that the landlord has not complied with the Energy Efficiency Improvement regulations, they can take the case to a First-tier Tribunal General Regulatory Chamber. The financial penalties for not meeting MEES in 2018 could be as much as £5000 in the domestic sector.
The government have promised a new Scheme in 2016 which will replace the now discontinued, Green Deal and is said to be “the final piece in the jigsaw” to set the framework for energy efficiency compliance.
Landlords have been given some time to improve their properties, but at the very least should be commissioning an Energy Performance Certificate now to find out where they stand.
- The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (Part 1 & 2)
As from 1 April 2016, Parts 1 & 2 of the Regulations enable a tenant of a residential private rented property to request (in writing) their landlord’s consent to allow them to make an “relevant energy efficiency improvement” to the property.
The cost of the improvement would have to be borne by the tenant or from central government grant funding, and at no cost to the landlord. Following a request the landlord must then provide an initial response within one month. The landlord must not unreasonably withhold its consent although, though alternative energy efficiency measures may be proposed. There is an appeal in dispute to the First Tier Tribunal for the matter to be determined.
- The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (Part 3)
From 1 October 2016, Part 3 of the Regulations come into effect and will apply to both domestic and non-domestic (commercial) private rented property. Part 3 provides that from 1 April 2018 a landlord may only grant a new tenancy (including a renewal) of a property that has an EPC rating of at least “E”.
The following exceptions apply where:
a. The improvements are not cost effective
b. If, after reasonable efforts, the landlord cannot obtain necessary consents to do the improvements
c. An independent surveyors report can show that the proposed measures will reduce the value of the property.
An application for exemption must be registered the PRS (Private Rented Sector) Exemptions Register, maintained by the Secretary of State.
Landlords to make Energy Efficiency improvements https://t.co/dhv3hiBKyc
— LandlordZONE (@LandlordZONE) May 27, 2016