What is an EPC?
An Energy Performance Certificate (EPC) measures the energy efficiency of a property on a scale of A-G.
Energy Performance Certificates were introduced in England and Wales in 2007 and are a legal requirement for a building to be sold, let or constructed. Once obtained, an EPC is valid for 10 years.
The most efficient homes – which should have the lowest fuel bills – are in band A. The Certificate also tells you, on a scale of A-G, about the impact the home has on the environment. Better-rated homes should have less impact through Carbon Dioxide (CO2) emissions.
The average property in the UK is in bands D-E for both ratings. The Certificate includes recommendations on ways to improve the home’s energy efficiency to save you money and help the environment. EPCs apply also to commercial buildings and are rated only by Carbon Dioxide emission ratings on a scale of A-G.
MEES and Energy Performance – April 2018 Banned from Letting below E
The Minimum Energy Efficiency Standard (MEES) is almost upon us and will see Landlords charged with the requirement to bring their rental property to a minimum EPC rating of E. Property with F and G rating will effectively be banned from the rental market.
You don’t need an Energy Performance Certificate if you can demonstrate that he building is any of these:
Listed or officially protected and only the minimum energy performance requirements would unacceptably alter it
a temporary building ie caravan/mobile home
an industrial site. workshop or non residential agricultural building
a detached building with a floor space of 50 square meters
due to be demolished by the seller or landlord and have relevant planning consent
Key deadlines for Landlord to be aware of are that;
1. from 1 April 2018, landlords will no longer be permitted to grant new tenancies extend or renew a tenancy to an existing tenant if the property has an EPC rating of band F or G. G (as shown on a valid Energy Performance Certificate for the property);
2.from 1 April 2020, landlords must not continue letting a rental property which is already let if that property has an EPC rating of band F or G.
In both cases above Where a property is rated band F or G a landlord will need to make improvements to the property to raise the EPC band to a minimum level of E. However, there are exemptions to this which are:
The landlord is unable to obtain funding to cover the cost of making improvements; or
where all improvements which can reasonably be made have been made, and the property remains below an EPC rating of Band E.
Where the property is energy inefficient we strongly advise you read the government guidance Hard to treat and energy inefficient properties
The key element of the Energy Efficiency Regulations was originally based on a principle of ‘no cost to the landlord’, This meant that if a landlord could not obtain funding to undertake the recommended improvements they will be exempt from meeting the minimum energy efficiency level of band E. However, the Government is now reviewing this decision with speculation that Landlords will be required to contribute between £2500 and £5000 towards the cost of improvement.
The remaining costs can be made up of one or a combination of the following:
1.A Green Deal Plan;
2.Energy Company Obligation or similar scheme;
3.Funding provided by central government or local authority or third party at no cost to the landlord;
It is thought that if the recommended works cannot be covered by funding plus the Landlord contribution then the Landlord can apply for an exemption for the property. In this case the Landlord will need to apply to the national PRS Exemption Register.
The final decision on Landlord contribution is now subject to a Consultation paper which has been published and can be viewed here. This remains open until the 13th March, with the results expected on the 1st April which somewhat oddly is the day the regulations come into force. Whilst there is some speculation that introduction of the legislation will be delayed, we can say with some certainty that the minimum rating level will not be changed and Landlord should act now to ensure their properties comply.