The Department for Business, Energy and Industrial strategy (BEIS) have recently published their guidance on the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (MEES Regulations).
The MEES Regulations set out a minimum standard of energy efficiency for privately rented property, being an energy performance certificate (EPC) rating of at least E. Property falling below that standard, i.e. F or G means that:
a) from 1st April 2018, landlords are restricted from granting new tenancies, or renewing, or extending to periodic existing leases: and
b) from April 2023, landlords cannot continue to let the property without carrying out works to improve the EPC of the property to raise it’s rating to at least an E or, alternatively, registering an exemption where one applies.
When is an EPC required?
Usually, the landlord or letting agent is required to make an EPC available to the prospective tenant.
An EPC may not be required in a number of circumstances, such as temporary buildings, buildings used as places of worship, buildings due to be demolished and protected/listed buildings.
BEIS have clarified the status of exception relating to listed buildings, stating that some listed buildings may be exempt from the EPC requirements but NOT all. An EPC will not be required only in so far as compliance with the EPC requirements would unacceptably alter its character of appearance.
In limited circumstances, an exemption may apply to the prohibition on letting a sub standard property. The landlord will need to provide details and evidence of the exemption to a centralised self-certification register (the PRS Exemptions Register).
Some of these exemptions may include where the energy efficiency measures would reduce the market value of the property by more than 5%, or where consent is legally rehired to undertake the improvement works (i.e. from a lender, planning authority or superior landlord) and where that consent is not forthcoming.
The exemptions will usually only apply on a 5 year temporary basis and it must be noted that any exemptions claimed y a landlord will NOT pass to a new owner or landlord upon the sale or transfer of the property. Therefore any new owner must either carry out the improvement works to raise the EPC to the minimum standard or, if they intend to continue to let the property (as sub-standard) must register an exemption where one applies.
An enforcement authority may impose financial penalties of up to £5000, or 10% of the rateable value of the property whichever is the greater (to a maximum of £50,000) where the landlord has been in breach for less than 3 months. Where the landlord has been in breach for 3 months or more penalties increase to £10,000 or 20% of the rateable value (to a maximum of £150,000).
Will this new legislation affect you and your property?
We may be able to assist you. We currently, and for a limited time have access to funding to help you improve your EPC rating. Funds are available for replacement boilers, loft insulation and a raft of other improvement measures. For more information please call the office on 01548 853555.