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Minimum Energy Efficiency Standards

Thu 18 Feb 2016

From the 1st April 2018 there will be a requirement for any properties rented out in the private rented sector to normally have a minimum energy performance rating of E, on an Energy Performance Certificate (EPC). The regulations will come into force for new lets and renewals of tenancies with effect from 1st April 2018 and for all existing tenancies on 1st April 2020. It will be unlawful to rent a property which breaches the requirement for a minimum E rating, unless there is an applicable exemption. A civil penalty of up to £4,000 will be imposed for breaches. This guidance summarises the regulations. There are separate regulations, effective from 1st April 2016 under which a tenant can apply for consent to carry out energy efficiency improvements in privately rented properties. Click here for this Guide.
 
Scope
 
The Regulations apply to domestic private rented sector properties in England and Wales. This includes–
• Properties let under an assured tenancy or a shorthold.
• A tenancy which is regulated for the purposes of the Rent Acts.
• Properties let;
    (a) On a tenancy which is an assured agricultural occupancy
    (b) On a protected tenancy under the Rent Act 1976
    (c) On a statutory tenancy under that Act.
 
Need for an EPC
 
•Properties within scope will include any domestic privately rented property which: has an EPC, and is either (i) required to have an EPC; or (ii) is within a larger unit which itself is required to have an EPC, either at point of sale, or point of let. No changes are made to existing regulations regarding the provision of EPCs.
• Flats and houses are subject to the regulations. In the case of flats this means self-contained unit. Non self-contained units such as bedsits do not require an individual EPC.
• If a property does not have an EPC then the regulations do not apply.
• If a bedsit is within a property that does have an EPC then the Regulations will need to be complied with before the bedsit can be rented out. Although as such bedsits do not need an EPC if the house containing the bedsit has been sold for example it will have an EPC in which case the Regulations will apply.
 
The EPC must be the current EPC if there is one and this must be no more than 10 years old.
 
Improvements which can be required
 
Improvement work, which can be required, is any energy efficiency improvement work which qualifies for Green Deal for the installation of gas for an off gas property so long as the mains are within 23 metres from the property.
 
Prohibition on letting
 
A domestic private rented sector property is substandard if the EPC rating is F or G, unless an exemption applies. The legislation prohibits a landlord from letting out a substandard property. If there is an EPC in place which shows that the property is an F or G then it must not be let; otherwise the landlord is liable to penalties. This is subject to any available exemptions. Energy efficiency improvements must be carried out to bring the property up to an E rating at the minimum, unless one of the exemptions is applicable. In particular, if the work cannot be carried out so as to meet the Green Deal Golden Rule then there is potentially an exemption. Under the Golden Rule there should be no upfront costs (or any net cost to the landlord) because savings resulting from the works should repay their cost over the expected lifetime of the works.
If a landlord lets and continues to let the property in breach of the regulations, however, the breach does not affect the validity or legality of the tenancy itself, so the rent still continues to be payable.