Since their introduction in 2007, landlords have been required to supply an Energy Performance Certificates (EPC) on the start of a new tenancy. The Government have continued to increase the energy standards required for tenancies through the Domestic Minimum Energy Efficiency Standard (MEES) Regulations which set the minimum requirement.
As of 1 April 2020, any assured, regulated, or domestic agricultural tenancies have required the landlord to no longer let or continue to let properties which hold an EPC rating below E, save for some limited exemptions.
If you are currently letting a property that holds a rating below E, immediate action must be taken to improve the EPC rating. Likewise, if you are considering letting a property with a rating that is below an E, you must improve the rating before letting the property. However, if you have a property that you are not letting and have no plans to, that is below an E, no action need be taken, although it is advised to do so.
Improvements may be relatively cheap, or they may cost thousands of pounds, however, if ignored the current maximum penalty for breaching the MEES regulations is £5,000. This would be applied if the property were rented out with an EPC rating of below an E and further if the landlord failed to comply with a compliance notice.
When you receive an EPC rating the attached report will include the measures which are highly recommended, as well as a further list of all recommended steps you could, and or should, take.
Some common measures to action are:
Both the Department for Business, Energy & Industrial Strategy and the Department for Levelling Up, Housing & Communities have been monitoring the energy standards and updating their plans as to the EPC laws under the MEES regulations.
Through the consultations published by the Government we know that the current plan is that by 2025 all new tenancies will require an EPC rating of C or above. Following this change, it is planned that by 2028, all tenancies will require an EPC rating of C or above. This will again cost some landlords thousands of pounds to raise their properties up to the sufficient standard. However, it will more than likely be less than the new maximum fine, which is currently set to be £30,000.
These are major changes which will have a significant impact, a recent report conducted by The Mortgage Works has found that 52% of landlords have considered selling due to these changes.
Pinney Talfourd are experts in residential property litigation and can advise you on changes to the law so you are given up to date advice.
Please do not hesitate to contact on 01708 511 000 should you wish to discuss anything further.
The above is meant to be only advice and is correct as of the time of posting. This article was written by Jack Oliver, Solicitor in the Residential Property Litigation Team at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of April 2022