In 2016, two pieces of legislation relating to energy
efficiency came into force:
The Tenant’s Energy Efficiency Improvement and
Minimum Energy Efficiency Standards (MEES). Both
of these have a real impact on private landlords.
All domestic tenants now have the right to request consent for energy efficiency
improvements. In addition to this, it is now unlawful to let a domestic property
below a certain efficiency standards, with fines imposed on those who do not
comply.
Landlords may need to improve their properties but at the very least should
commission an Energy Performance Certificate (EPC) to find out where they stand.
From the 1st April 2016 all
domestic tenants have the right
to request energy efficiency
improvements to their properties.
This regulation applies to domestic properties let under longer term assured
and regulated tenancies. Your tenant will likely be eligible to request energy
e ciency improvements if he or she:
• Pays Rent to you
• Has control over their home
• Does not live in the same building as you
• Moved into the property between 15 January 1989 and 27 February 1997 with no notice given that they have an assured short-hold tenancy
Can a residential private landlord refuse a tenants request?
If the building is exempt from having an EPC then you are not required to provide consent. Your tenant must also
show that the improvements could be installed with no upfront cost to you. Funding schemes are intended to
facilitate energy efficiency without the need for upfront costs.
If a tenant considers that the landlord has not complied with the regulations, they can take the case to a First-tier
Tribunal General Regulatory Chamber, which will hear and determine applications.
From April 2018 changes to
legislation will make it unlawful
to let a residential property with
an Energy Performance Certificate
(EPC) rating below an ‘E’.
Phase one -
their EPC. The regulations will initially only apply upon the granting of a new tenancy to:
• A new tenant
• An existing tenant
Phase two - from 1st April 2020, the regulations will apply to ALL privately rented properties which are required to have
an EPC.
What does this mean for Landlords?
From April 2018 changes to
legislation will make it unlawful
to let a residential property with
an Energy Performance Certificate
(EPC) rating below an ‘E’.
from 1st April 2018, private rented properties must achieve an energy efficiency rating of at least an E on
An EPC is already required to let or market a property legally, but the new laws surrounding MEES means that an EPC
with a rating of F or G is not sufficient for compliance. If your property does not meet the minimum standard, then
unfortunately you cannot let or market that property within the law. Rent reviews could also be affected as a result of this.
Financial penalties for non-compliance can also be as much as £5000 in the domestic sector.
Following an amendment to
MEES regulations, from 1st April
2019, the ‘no cost to the landlord’
provision is no longer available.
This means that landlords can no
longer register a ‘no cost to landlord’
exemption on the PRS Exemptions
Register.
Where third party funding (ECO, Green Deal, grants etc) is unavailable,
landlords must use their own funding to cover the cost of improving their
property to EPC band E. This requirement is subject to a spending cap
of £3,500 (inclusive of VAT) for each property.
Those who have already registered for the ‘no cost to landlord’ exemption prior to regulation changes (1st April 2019),
will no longer be exempt for five years, and will now need to make the necessary improvements to their property to
ensure it meets EPC band E (or as close as possible) by April 2020.
About the cost cap
The £3,500 (incl VAT) cost cap applies to the overall cost of improving the property and is not a cap applied to individual
measures. Landlords only need to fund what is necessary to improve the property to EPC band E. The spending cap is
not a requirement and analysis shows that the average cost of improving a property from EPC band F or G to band E,
would be much less than this.
In cases where a landlord is unable to improve their property to band E within the £3,500 cap, then they should install
all measures which can be installed up to the £3,500 cap, and then register an exemption on the basis that ‘all relevant
improvements have been installed and the property remains below an E’.
Combined third party and self-funding
Landlords may be able to secure some third-party funding, but it might not be enough to improve their property to EPC
band E. In this case regulations stipulate that landlords must top up this third party funding with funding from their own
pockets, provided that the combined value is less than the £3,500 (incl VAT). If the combined funding is insu cient to
improve the property to EPC band E then the landlord should install all measures which can be installed up to the value
of £3,500, and then register an exemption on the basis that 'all relevant improvements have been installed and the
property remains below an E'.
The Government has outlined
some instances where Landlords
may be exempt from complying
with MEES. All exemptions are
likely to have a time constraint.
Landlords can register a property as exempt from the private rented
property minimum standards through the online PRS Exemptions Register.
A landlord would need to provide relevant supporting evidence when
registering for an exemption. Landlords can register for the following
exemptions:
High Cost’ Exemption
If the cost of making even the cheapest recommended improvement to a property exceeds £3,500 (inc VAT)
All Improvements Made’ Exemption
MEES Exemptions
The Government has outlined
some instances where Landlords
may be exempt from complying
with MEES. All exemptions are
likely to have a time constraint.
Where all the “relevant energy efficiency improvements” for the property have been installed, however the property
still remains below EPC band E.
‘Wall Insulation’ Exemption
Certain wall insulation systems may not be suitable in certain situations, even when they have been recommended for
a property, and are within funding requirements. A written statement from a chartered building professional can be
used to highlight the fact that a property cannot be improved to EPC band E, as the recommended wall insulation
would have a negative impact on the property.
Consent’ Exemption
If consent to undertake work to install the required energy efficiency improvements is denied by a tenant, lender,
planning authority or higher landlord, this will make the landlord exempt from MEES for five years (unless the
tenant who denied consent vacates the property).
Devaluation’ Exemption
Where a chartered surveyor (RICS registered) advises that installation of specific energy efficiency measures would
reduce the market value of the property by more than 5%.
‘New Landlord’ Exemption
Where an individual has become a landlord unexpectedly, it is deemed unreasonable and inappropriate to expect
them to comply immediately with the standard. A temporary six month exemption may be used in this case.
The Deregulation Act 2015 protects
tenants against unfair eviction
where they have raised a
legitimate complaint about the
condition of their home. This
includes issues about its energy efficiency.
New legislation will also affect your rights to evict a tenant who has a
legitimate complaint concerning your energy efficiency compliance.
Short-hold tenancies granted on or after 1st October 2015 are subject
to new rules brought about by Section 33 of the Deregulation Act.
The rules are designed to prevent ‘retaliatory eviction’ practices and effectively make it more difficult for you to serve
a section 21 eviction notice to tenants where complaints have been raised about the condition of your property.
This would include complaints about its energy efficiency.
What does this mean for Landlords?
Before serving a section 21 notice you must demonstrate that you have complied with the relevant legal obligations concerning:
• The condition of the dwelling
• The health and safety of occupiers in the dwelling
• The energy performance of the dwelling
• Gas certification
And
• All the above information has been provided to the tenants.
As such, if you have not provided your tenant with an EPC, you will risk losing the right to issue an eviction notice.
The Housing Health and Safety
Rating System (HHSRS) employs
a risk assessment approach to
minimise the risks from hazards to
health and safety in dwellings.
Owners are obliged to comply with any terms of improvement notices or
prohibition orders. The landlord is responsible for looking after the exterior
of the dwelling as well as installations inside the dwelling.
Excess cold
Excess Cold is one such hazard that can threaten the health of an occupant through low indoor temperatures. This
hazard in particular is evidenced through poor heating systems, lack of thermal insulation, excess ventilation, and
low energy efficiency ratings. Since the introduction of Minimum Energy Efficiency Standards (MEES) some local
authorities have been interpreting dwellings with F and G EPC rating as indicators of hazard, however, this should
not be automatically assumed.
What enforcement action could occur against Landlords?
Housing Health and Safety Rating System
The Housing Health and Safety
Rating System (HHSRS) employs
a risk assessment approach to
minimise the risks from hazards to
health and safety in dwellings.
If there are any risks to the health and safety of an occupant, the Environmental Health Officer can enforce corrective
measures in the form of improvement notices and prohibition orders. The local authority charges for issuing these
notices, and failure to comply with them within the specified time frame is deemd a criminal offence.
Information by Elmhurst Energy
www.elmhurstenergy.co.uk
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