30^th Oct 2017

In spite of the new Energy Performance ratings requirement being announced by the government earlier in the year, it has only just released its guidance for all private sector landlords regarding the certification and minimum levels required for their properties from April 1st 2018.

The new EPC will be applicable for properties that have new tenancies starting on or after the 1st April 2018 and any existing tenancies that are renewed after the date, however for those tenancies that don't need to be renewed for a couple of years, the EPC rating will not apply for those properties until 1st April 2020. Failure to comply will result in landlords facing a fine of up to £5,000.

The regulation's requirement will be mandatory for assured shorthold and Rent Act tenancies which have an existing Energy Performance Corticated or should be holding one.

Those properties that have an EPC rating of F and G will fall below the required minimum level of an E band.

The new regulations will ban any landlord with a property of F and G from renting them out until they have remedied the problem to improve the rating to the acceptable level.

To sum up the new minimum level of energy efficiency requirements for landlords' properties and the actions needed to be taken if an energy performance is substandard:

Any landlord from 1st April 2018, will not be allowed to start a new tenancy from or after that date, nor extend/renew an existing tenancy if the property has an EPC rating falling within the bands F or G. This also applies to any tenancies changing from a fixed term to a statutory periodic tenancy.

As from April 1st 2020 any landlord will be prohibited from renting out a residential property that has an EPC rating of F and G.

Landlords that have a property with an F or G rating will have to improve the energy performance by making the necessary improvements to raise it to the required E minimum level.

However there are such exemptions to the regulation:

If the landlord is unable to obtain the necessary funding to cover the work that needs to be carried out to make the property EPC compliant.

Where the landlord has funded improvements where it is considered that they acted 'reasonably' but the property still falls short of and EPC E rating.

The two exemptions mean that any landlord who cannot find funding for the improvement of the property to reach the E band will not be stopped from renting it out (within reason of course).

Funding opportunities for landlords to receive contributions for making improvements are the following, please note that you may be able to use one or more of these options.

Green Deal plan - Energy Company Obligation or such like scheme - Government or authority or a third party funding at no cost to the landlord.

If a landlord is able to access funding for the cost of recommended improvements for their property to reach a band E rating, then they must proceed. However if the funding available does not cover all of the costs for the intended improvements then the landlord does not have to carry them out. The energy efficiency regulation is only applied if there is ‘no cost to the landlord’ and landlords who have been unable to secure the necessary funds could be exempted.

Landlords applying for an exemption must register it with the national PRS Exemptions Register.

Richard Merrick of PIMS, said: " This guidance looks to be rushed together without any proper thought as the Green Deal is no longer available to landlords. However being fair to the government they may be introducing a similar scheme or in fact bringing back the Green Deal.

"With funding cuts to authorities it is more than likely that many landlords may be exempted if they have exhausted all avenues of funding - but remember to register a claim for exemption with the PRS Exemptions Register."

Further posts on the Guidance and funding options will be published shortly.

To read or download the Guide click here

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