Energy Performance Certificates
Ask some landlords and even some agents what ‘EPC’ stands for and they will struggle to answer, and that’s OK, as EPCs last for ten years, and so can easily slip from memory.
EPC actually stands for Energy Performance Certificate, and from 2018 a spotlight pointed in their direction … and EVERY landlord will know exactly what EPC stands for. This is because from April 2018 all properties will have to have a minimum EPC rating of ‘E’ to enable landlords to continue renting them.
In a Nutshell
The new EPC regulations affect all NEW lets and all RENEWALS of existing tenancies, with effect from the 1st April 2018. It will also apply to all EXISTING tenancies from the 1st April 2020.
(Note: the Regulations actually came into force on the 1st October 2016 to give eligible landlords the opportunity to claim exemptions as soon as possible, and get their exemptions in place prior to the 1st April 2018)
Three Steps to EPC Heaven
The first step: Get an up-to-date EPC of all the properties you own, manage or Rent 2 Rent. This will show what the property was rated at, and what it could potentially be if you carried out the suggested improvements.
Step two: Inspect the properties and create a schedule of works for all the improvements you have identified.
Step three: There are some Green Deal initiatives and grants being launched to assist landlords in getting their properties up to scratch, so check and see if you are eligible. (More info below). Note; there will be a lot of applications when this kicks-in, and all resources are finite, so you’ll need to fast off the mark. There is also a good blog by the RLA with more information (below).
Some quick-fixes you can do straight away are fitting LED energy efficient light bulbs throughout, get the loft (and loft hatch) insulated, make sure all windows and doors are draught free and replace any windows that have broken seals (the glass will have misted up).
Older Properties and Listed Buildings
Many older PRS properties have solid wall construction and would struggle to reach the required E rating. In this case the Government is proposing to recalibrate EPCs to give a ‘truer’ reading, which could mean less work required to get them up to standard.
The Government plan to exclude listed buildings from the full scope of the requirements, but to exactly what extent is still unclear: ‘Exemption is insofar as compliance with certain minimum energy efficiency requirements which would unacceptably alter their character or appearance’. Exemptions will only endure for five years. They will then need to be reviewed to see if they still apply. If not, the work will have to be carried out.
Infringements, Penalties and Enforcement!
Eeeek! What’s terrible words! If there is an EPC in place which shows that the property is an F or G, or indeed if there is no EPC, then the property must not be let; otherwise the landlord is liable to severe penalties. False or misleading information will result in a £1k fine and failure to comply with a compliance notice from a local authority with result in a £2k fine. Renting out a non-compliant property will also entail a £2k fine, and in all cases the culprit will be publically named and shamed.
Penalties for a single offence may be cumulative, up to a maximum of £5,000. Further penalties may be awarded for non-compliance with the original penalty notice where a landlord continues to rent out a non-compliant property.
Upon receiving a penalty notice from a local authority, Landlords may appeal on the basis that the penalty notice was issued in error of law or in error of fact, and may request a review of the local authority’s decision to serve the notice. If it is decided that the landlord has not committed the breach specified in the notice, or given the circumstances of the case it was not appropriate for a penalty charge notice to be served, the authority must withdraw the penalty notice.
If a landlord lets and continues to let a property in breach of the regulations, the breach itself does not affect the validity or the legality of any tenancy, so the rent will continue to be payable.
As responsible landlords and Rent 2 Rent’ers, we should always be looking at ways to save money and to make our customers lives more comfortable. Raising the standards of insulation in the properties – albeit time consuming to get it organised – will tick both of those boxes … and help the environment to boot. We would advice becoming a market leader and doing it sooner than later.
PS. Minimum Energy Efficiency Standards.
Here is a list (not exhaustive) of eligible areas where we will need to comply with the minimum energy efficiency standards: thermostats, boilers, radiator thermostats, cavity wall insulation, solid wall insulation (internal or external), cylinder thermostats, cylinder insulation, draught proofing, hot water showers/systems, external doors, hot water controls (including timers and temperature control), lighting systems fittings and controls (including roof lights, lamps and luminaries), loft insulation (including loft hatch insulation), pipe-work insulation, gas fired condensing boilers, replacement glazing, secondary glazing, solar water heating, under floor insulation, efficient high speed driers, waste water heat recovery devices attached to showers etc.
Check out some more great articles from Francis and Emily at www.multiletcashflowsystem.com/blog