Will you fall foul of the new Minimum Energy Efficiency Standards for Rental Houses?

The Energy Efficiency (Private Rented Property)(England and Wales) Regulations 2015 establish a minimum level of energy efficiency for privately rented property in England and Wales. This means that, from April 2018, landlords of privately rented domestic and non-domestic property in England or Wales must ensure that their properties reach at least an Energy Performance Certificate (EPC) rating of E before granting a new tenancy to new or existing tenants. These requirements will then apply to all private rented properties in England and Wales (even where there has been no change in tenancy arrangements) from 1 April 2020 for domestic properties.

 

Failure to ensure that your property is up to this standard will mean you will be breaking the law and as a result could face a fine of up to £4,000. You won’t be able to rent out the property until improvements have been made to ensure it meets the energy efficiency requirements.

Landlords who are installing relevant energy efficiency improvements may, of course, aim above and beyond this current requirement if they wish.

The domestic property regulations will be enforced by Local Authorities.

 

Prohibition on letting sub-standard property

The minimum standard will apply to any domestic privately rented property which is legally required to have an EPC and which is let on certain tenancy types. Where these two conditions are met the landlord must ensure that the standard is met (or exceeded)

Landlords of domestic property for which an EPC is not a legal requirement are not bound by the prohibition on letting sub-standard property.

The minimum level of energy efficiency means that, subject to certain requirements and exemptions:

  1. a) from the 1st April 2018, landlords of relevant domestic private rented properties may not grant a tenancy to new or existing tenants if their property has an EPC rating of band F or G (as shown on a valid Energy Performance Certificate for the property);
  2. b) from the 1st April 2020, landlords must not continue letting a relevant domestic property which is already let if that property has an EPC rating of band F or G (as shown on a valid Energy Performance Certificate for the property).

Where a landlord wishes to continue letting property which is currently sub-standard, they will need to ensure that energy efficiency improvements are made which raise the EPC rating to a minimum of E. In certain circumstances landlords may be able to claim an exemption from this prohibition on letting sub-standard property; this includes situations where the landlord is unable to obtain funding to cover the cost of making improvements, or where all improvements which can be made have been made, and the property remains below an EPC rating of Band E.

Where a landlord believes that a property they rent qualifies for an exemption from the minimum energy efficiency standard, an exemption must be registered on the National PRS Exemptions Register. The register service is currently running as a pilot. Landlords who wish to register an exemption for a domestic or non-domestic property as part of this pilot should e-mail the BEIS minimum standards team at PRSregisteraccess@beis.gov.uk

If this new ruling affects you, advice can be sought by contacting one of our lettings experts who will be happy to assist you.

More information is available here: https://www.gov.uk/government/publications/the-private-rented-property-minimum-standard-landlord-guidance-documents

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