Q. Can you please tell me more about the ‘minimum level of energy efficiency’ Legislation that I hear is about to impact Landlords and the rental market imminently?
A. Yes you are quite right, these changes will mean that from the 1st of April 2018 it will be unlawful to let or lease a residential or commercial property with a poor EPC rating. The Department for Business, Energy and Industrial Strategy has recently released guidance to landlords of privately rented non-domestic property on complying with the 2018 ‘minimum level of energy efficiency’ standard (EPC band E). The Energy Efficiency (Private Rented Property)(England and Wales) Regulations 2015 mean that, from April 2018, private non-domestic (and domestic) landlords must ensure that properties they rent in England and Wales reach at least an EPC rating of E before granting a tenancy to new or existing tenants. So how will this impact you and what can you do to ensure you comply? Properties with an EPC rating of less than ‘E’ must be improved with suitable energy efficiency measures to bring their ratings up to at least an ‘E’. After 1st April 2018, buildings that do not meet the minimum standards cannot be re-let until improvements are made. If owners re-let the property without the improvements required they will face a penalty fine of up to £5,000 for domestic properties and £150,000 for non-domestic properties. While exemptions can be registered in certain circumstances, these are only a temporary solution and by 2020 it will be illegal to continue to lease a domestic property with an EPC rating of ‘F’ or ‘G’. Even properties that currently have an EPC rating of “E” are at risk from the regulations as the standard for achieving an “E” grade has become tougher since EPCs were first introduced. Landlords must also review any requests for energy efficiency improvements made by tenants and not refuse without reason as defined in the regulations. MEES (minimum energy efficiency standards) providers are already on hand to deliver a programme of refurbishments and upgrades to landlord’s properties to ensure that they are complaint with the new legislation. Given this is still twelve months away I would strongly recommend that landlords take a look at their properties and if their current EPC looks set to be non-compliant then take action as soon as possible to prevent possible serious ramifications later.