Most properties in the UK are required to be rated on a scale from A – G, with G being the least energy efficient. The rating of a property is detailed in the Energy Performance Certificate for that property. The relevant legislation is the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (“the Regulations”), which originate from the Energy Act 2011 and introduced the minimum energy efficiency standard.
The Regulations make it unlawful for a landlord to let a property which is considered to have a “sub-standard” energy efficiency, that being those properties rated as either a F or G.
The Regulations contain penalties, including the issue of a fine, which may be imposed on a landlord who does not comply with the Regulations. If a landlord breaches the Regulations, that breach will not affect the validity or enforceability of any provision of the lease or tenancy agreement.
The Regulations will apply to new or renewed leases of residential property from 01 April 2018 and to existing leases of residential property from 01 April 2020. The Regulations will apply to new or renewed leases of commercial property from 01 April 2018 and to existing leases of commercial property from 01 April 2023.
As a result of the Regulations taking effect, any property which has an Energy Performance Certificate (“EPC”) rating of less than E will likely be impossible to sell or mortgage from April next year.
What can Landlords do now?
The Regulations contain some exceptions, which you may be able to rely on in certain circumstances, however detailed analysis of the situation is essential to make sure that you do not incorrectly rely on an exception and end up getting caught out by the Regulations.
Our advice, if you are a landlord and you currently own a property which has a low energy efficiency rating, you will need to undertake “relevant energy efficiency improvements” at the property to increase the rating and ensure that you are not breaching the Regulations.
For commercial properties, the EPC will come with a full Recommendations Report which will detail all works which can be undertaken at a property to increase the rating, which is a good place to start!
A similar report is produced for residential properties, although it is not always as detailed as its commercial counterpart. You can obtain advice from an energy surveyor; see the gov.uk website for a list of local assessors.