Biggest change to the property rental sector for over a generation?
The government has laid out plans to raise the minimum energy efficiency standards for UK properties, with some claiming the changes represent the biggest shakeup of the let property sector for over a generation.
Apart from certain exempted buildings, an Energy Performance Certificate (EPC) is required when you build, sell or rent a property or market a property for rent or sale. The EPC provides buyers or tenants with information about the property’s energy use and typical energy costs along with recommendations about how to reduce energy use and save money. EPC energy efficiency ratings range from A (the most efficient) to G (the least efficient) and are valid for 10 years.
The new regulations are being introduced under the Energy Act 2011. The key points for landlords to bear in mind are:
- From 1 April 2018 all buildings (domestic and non-domestic) that require an EPC will need to achieve a rating of E or higher to be let under a new tenancy to a new or existing tenant.
- From 1 April 2020 the entry-level E standard will apply to all existing tenancies of domestic properties that require an EPC.
- From 1 April 2023 the minimum E rating will apply to all existing tenancies of non-domestic properties that require an EPC.
Landlords of domestic properties that breach the new regulations will face a penalty of either £2,000 or £4,000, while landlords of non-domestic properties that fail to meet the standard will be fined either 10 per cent or 20 per cent of the rateable value of the property, with a minimum fine of £5,000 and a maximum fine of £150,000.
EPC certificate exemptions
Exemptions from EPCs for certain properties and situations still apply and if your current tenant refuses to let you carry out the required work, you can also claim an exemption. An exemption will also apply where the work required to achieve an E rating will reduce the property’s value by more than 5 per cent in the view of a RICS-registered valuer. You will need to register which exemption you are claiming for and submit evidence to a central register operated by the Department of Energy & Climate Change.
Expert legal advice on Energy Performance Certificates
For expert legal advice on the new regulations contact Commercial Property Services Partner Nicolas Wickens on 01323 435 900 or .
Posted: 17 March 2015
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