Residential Lettings and EPCs - Update

April 15, 2019

Emma Nailor
print

The Energy Efficiency (Private Rented Property)(England and Wales) Regulations 2015 (SI 2015/962) (MEES Regulations) are intended to improve the energy efficiency of both residential and commercial private rented property.  

 

The MEES Regulations established a minimum standard of EPC rating of “E” for both domestic and non-domestic private rented property which has affected new tenancies and renewals since 1 April 2018.  

 

A recent change to the MEES Regulations has been effected under the Energy Efficiency (Private Rented Property) (Amendment)(England and Wales) Regulations 2019 (the Amendment Regulations). From 1 April 2019, landlords of domestic property are prohibited from granting new leases, and renewing or extending leases of properties, with an EPC rating below “E” unless the landlord first makes sufficient energy efficiency improvements so that the property is no longer sub-standard (“F” or“G” rating), or can claim one of the legitimate reasons not to do so.

 

From 1 April 2020, landlords will be unable to continue letting domestic property unless they have complied with the regulations.

This applies to:

  • Assured (and assured shorthold) tenancies under the Housing Act 1988;
  • Tenancies under the Rent Act 1977;
  • Assured agricultural occupancies under the Housing Act 1988; and
  • Tenancies and occupancies covered by the Rent (Agriculture) Act 1976.

 

The most important changes under the Amendment Regulations are:

  • the addition of a capped landlord contribution of £3,500 (inclusive of VAT) in respect of any investment in energy efficiency made to sub-standard property by the landlord since October 2017.  This cap includes any third-party funding;
  • a new “high-cost” exemption for sub-standard property where the property cannot be improved to an EPC rating of an “E” for £3,500 or less;
  • any existing “no cost to the landlord” exemptions for EPCs to expire on 1 April 2020 in certain cases;
  • the removal of the “consent exemption” where a tenant withholds consent to a Green Deal Finance Plan – the landlord will have to seek alternative means of funding – i.e. self funding; and
  • where a tenant does not consent to an improvement, the inability for the landlord to reply on such an exemption when the tenancy ends.

 

Landlords who fail to comply with the MEES Regulations can face fines of up to £5,000 and the possibility of a publication penalty, meaning that details of the landlord’s breach will be publicly accessible on the PRS Exemptions Register.

 

If you require any assistance in finding a suitable Energy Assessor or require advice in respect of your responsibility to comply with MEES Regulations, please do not hesitate to contact us.

BLOGS