The requirements for private rental properties are being tightened under the law, as the Government brings the various provisions of The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 progressively into force in order to promote a new baseline minimum level of energy efficiency.
From 1 April 2018, landlords must have implemented energy efficiency improvement measures to ensure that privately rented properties in England and Wales achieve an Energy Performance Certificate (EPC) rating of E or better before they agree a new tenancy with existing or new tenants. This requirement will be extended to all domestic rental properties in April 2020, whether or not there has been a change in tenant, and similarly to non-domestic rental properties from 2023.
This is known as the Minimum Energy Efficiency Standards, or MEES.
The required improvement measures referred to include any energy efficiency enhancement work that qualified for the Green Deal, and the installation of a gas supply provided the property is within 23m of the main.
The requirement will not apply to properties that are exempt from needing an EPC, such as some listed or temporary buildings, furnished holiday accommodation and properties that have been let continuously on a Regulated Tenancy to the same tenant since before 1 October 2008.
A landlord may be able to gain an exemption from the requirement under certain limited circumstances. These include:
- Where all practicable energy efficiency improvements have been implemented but the property still fails to achieve EPC E banding.
- A necessary measure cannot be implemented because it would have a negative effect on the structure or fabric of the building.
- Third party consent is required to implement a measure, but it cannot reasonably be obtained.
- A Chartered Surveyor’s report demonstrates that the measures would reduce the value of the property by more than 5%.
Exemptions may also be possible where landlords can demonstrate that they have been unable to access funding such as Green Deal, Energy Company Obligation or other grants to cover the full cost of installing the recommended improvements, though the details of this are subject to an on-going Government consultation exercise.
Special arrangements are also in place to provide time for landlords that have recently inherited properties to bring them up to the required standard.
Any exemption must be registered on the National PRS Exemptions Register on the BEIS website by 1 April 2018. The exemptions are for five years, during which time the landlord is expected to make further attempts to bring the property up to at least band E status, though a further exemption can then be applied for if this has not been reasonably possible. Exemptions do not pass with title, so a landlord buying a property with an existing exemption will need to apply for a new one.
The Regulations will be enforced by local authorities, who can issue compliance notices and demand copies of relevant paperwork. They can hand out fixed penalties for non-compliance, and these can reach a maximum of £5,000 per breach.
The Government’s guidance on the requirement is available here.