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26th July 2018

Landlords forced to improve energy ratings

Improve your portfolio’s energy ratings

Do you know the energy ratings of your property portfolio? The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 started to be enforced from April 2018.

They apply to landlords of privately rented domestic and non-domestic properties in England and Wales. The core requirement is that properties must reach at least an energy performance certificate (EPC) rating of E. This applies from 1 April 2018 for any new tenancy created for new or existing tenants. From 1 April 2020, the legislation will apply to all privately rented homes, and from 1 April 2023, to all non-domestic properties.

The 2020 and 2023 deadlines apply to existing tenancies, even if the agreements are unchanged. Unless you can obtain an exemption, these are the dates by which you must comply.

Under the Energy Performance of Buildings (England and Wales) Regulations 2012 a rented property should have an EPC showing information relating to the property’s energy use, energy costs and potential energy savings measures.

How energy ratings work

Energy ratings - an energy performance certificate (EPC)

An Energy Performance Certificate

The energy ratings of a properties are on a scale of A to G, with A showing that the property is highly efficient, and G showing it has a low efficiency. Under the new regulations, properties with an F or G rating won’t be allowed to be let after the applicable date.

There are some exemptions e.g. where a property would lose at least 5% of its market value if alterations were to be made, or if the landlord cannot get permission from relevant third parties to install the needed improvements. The regulations do not directly exempt listed buildings, but there are means of gaining exemption if consent for changes cannot be obtained.

Domestic landlords can register exemptions with the PRS Exemption Register from October 2017, while non-domestic landlords have been able to do this since April 2017.

Exemptions cannot be passed on to new owners of a property when it is sold. A new application for exemption would need to be made, if necessary.

It will fall upon local authorities to enforce the new regulations for domestic properties, while the local weights and measures authorities will be responsible for the non-domestic properties. Non-complying landlords may face fines of between £2,000 and £150,000. Further fines of between £1000 and £5000 can be issued to landlords who give false or misleading information to the PRS Exemption Register.

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