Minimum energy performance ratings are changing from April 2018

Energy Performance Certificates

Last week, we discussed the legal responsibilities of landlords and tenants when it comes to energy efficiency improvements in rented properties, and because the issue of energy performance certificates (EPCs) has been in the news recently, we thought it best to remind landlords that from April 2018, a rental property must achieve a minimum energy performance rating of E before it can be let out.

The new regulations will come into force from April 2018, and the minimum requirement will apply to all tenancies that begin/are renewed on or after 1st April 2018. For all existing tenancies, the energy performance regulations will not apply until 1st April 2020. Any landlord found to be renting out a property with an energy performance certificate of F or G could be fined up to £5,000. The government is also planning to raise the minimum grade intermittently following 2020, with all properties expected to achieve a D grade by 2025, and a C grade by 2030.

F and G grade properties to be banned and landlords fined

The government has stressed that the new energy regulations will apply to all assured, assured shorthold and Rent Act tenancies that have or should have a valid EPC certificate. If a property only achieves an energy performance grade of F or G, it will be considered by the government as substandard, and a landlord will be prohibited from letting out the property to tenants until the recommended energy efficiency improvements highlighted in the EPC have been carried out successfully and to a suitable standard. Landlords are free to carry out energy efficiency improvements up to the best grade possible, but will only be expected to carry out works that are permissible, cost-effective and appropriate under the regulations.

All local authorities are responsible for enforcing the regulations, and they have the power to force landlords to provide evidence that energy efficiency improvements have been carried out. Local authorities can also impose financial penalties on any landlord found to be in breach of the regulations, and can impose further penalties on landlords who knowingly fail to improve standards following an original notice. However, the government has said that any penalties imposed do not affect the legality of a tenancy agreement, and tenants are still expected to pay any rent which is due.

Despite the new regulations, some exemptions do exist, such as when a landlord’s tenant fails to provide suitable consent for the energy improvement works, when an independent and qualified surveyor believes the works will cause capital devaluation of the property of 5% or more, and finally, when a third party (a super landlord/freeholder for example) fails to provide the necessary consent required by the landlord or gives consent with unreasonable conditions.

Who is responsible for making improvements?

If a landlord is attempting to rent out an F or G grade property, they are responsible for ensuring works are carried out to make sure their property achieves a minimum grade E. However, for all current tenancies, as of April 2016, tenants have the legal right to ask their landlords if they can carry out energy efficiency improvements at their own cost. A landlord must respond to a request in a timely manner and give reasons for any refusal. Landlords should do as much as they can to avoid refusing permission, and if they do, they must give reasons. A landlord can offer a tenant an alternative works proposal, but this needs to include detailed information about what works will be undertaken, and that the works will deliver the same cost savings detailed in a tenant’s original proposal. Any tenant who feels their request was unfairly dismissed by their property owners can bring the case to the First-Tier Tribunal to ensure the works are carried out.

As Cardiff’s largest letting agent, we have the experience and knowhow to help you understand energy performance certificates and any energy efficiency works which may need to be carried out. To find out more, or to speak with one our experienced lettings team, get in touch today on 02920 668585, email enquiries@cpshomes.co.uk or pop into our Woodville Road office in Cathays.

22 March 2017

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