Landlords need to get a new Energy Performance Certificate (EPC) every 10 years and with the new regulations now passed (made active from 1st April 2018) you can no longer rent out a property unless it passes an efficiency test and meets a minimum energy efficiency standard (MEES). To make sure your property is compliant, read on to find out what the new regulations are and how they affect you…
What Are the EPC Changes?
On 1st April 2018, the new EPC regulations came into force, which means it is now unlawful to let or lease a residential or commercial property with an EPC rating of F or G, unless there is an applicable exemption.
So which properties do the new EPC rules apply to?
• All properties in the private rental sector
• All properties on a lease between 6 months and 99 years
• All properties in England and Wales (Scotland currently has a similar legislation that is already in place)
Without an EPC rated E or above it will not be possible to issue a new tenancy or renew an existing tenancy. There are fines of up to £5,000 for landlords that are found in breach of the legislation.
Will the EPC changes affect current tenancies or just new lets?
These new regulations are in force now for new lets, renewals of tenancies, periodic tenancies and for all existing tenancies from 1st April 2020. At this point, you will need an EPC rating of an E or above to let your property at all.
What should I do if my rental property has an EPC lower than an E-rating?
If your last EPC rating was below an E, the first thing to do is to get an up-to-date EPC carried out. If the property’s new EPC rating is still below an E, then you will need to make efficiency improvements to boost your rating before you let it out or renew your contract.
Your EPC report will have a list of recommended measures for improving your property’s energy efficiency performance, which you will need to carry out to improve your score to above an E rating. Speak to your EPC assessor if you are unsure about how to proceed with improvements or what improvements to work on that will have the most impact. After you’ve made the energy efficiency changes to the property, you will then need to get another EPC to show the new energy rating.
Exemptions to new EPC rules
There are a few exceptions as to which properties must comply with the new regulations. If one of these apply, you can register for an exemption on the central register:
Devaluation: The required improvements will either cause damage or reduce the value of the property by 5% or more.
Consent: It is not possible to gain the consent for the works to be completed required from the tenant, lender or superior landlord.
Cost: The identified improvement measures are not cost-effective, either within a 7-year payback or under the Green Deal’s Golden Rule.
Commercial property exemptions
You don’t need an EPC if you can demonstrate that the building is any of these:
• Listed or officially protected and the minimum energy performance requirements would unacceptably alter it
• A temporary building only going to be used for 2 years or less
• Used as a place of worship or for other religious activities
• An industrial site, workshop or non-residential agricultural building that doesn’t use much energy
• A detached building with a total floor space under 50 square metres
• Due to be demolished by the seller or landlord and they have all the relevant planning and conservation consents
For further information on commercial property exemptions, please click here.
If you would like any further advice or support on the new EPC regulations, please feel free to contact our team:
Jo Stockton, Lettings Manager on 01903 213 111 / firstname.lastname@example.org
Steve Berrett, Commercial Director on 01903 201 212 / SteveBerrett@michaeljones.co.uk