New EPC Legislation

From 1st April 2018 the new Minimum Energy Efficiency Standards (MEES) comes into force. This will prohibit the granting of new tenancies (or renewing/extending existing tenancies) for properties with an EPC rating of F or G. The Government has further stated that from 1st April 2020, this restriction is extended to cover all existing tenancies for properties in scope of the regulations.

Local authorities will enforce compliance and non-compliant landlords could face a financial penalty of up to £5,000.

Exemptions

There are only a few exemptions to the regulations that landlords can use and exemptions must be registered with the PRS Exemptions Register before 1st April 2018.

• They have undertaken all “relevant energy efficiency improvements” but the property remains below an E, or no such improvements can be made to the property. A “relevant energy efficiency improvement” is one which:
  • Is listed in the Green Deal (Qualifying Energy Improvements) Order 2012 and has been identified as a recommended improvement for that property in a green deal report, a recommendation report, or a report prepared by a surveyor, and
  • Can be wholly financed, at no cost to the landlord, by means of funding provided by central government, a local authority, or any other person.
• The landlord requires consent from the tenant/s, and the occupying tenant/s withhold that consent.
• The landlord has only recently become the landlord for the property
• Third party consent is required for the requested improvements but this consent cannot be obtained (e.g. planning permission or consent from mortgage lender).
• Measures required to improve the property are evidenced by a suitably qualified independent surveyor as expected to cause a capital devaluation of the property of more than 5%. Only those measures that are expected to cause such devaluation would be exempt from installation.
• The landlord has obtained a written opinion, from a suitably qualified person or from the independent installer engaged to install the measure, advising that it is not an appropriate improvement due to its potential negative impact on the fabric or structure of the property (or the building of which it is part). This exemption is only in relation to wall insulation.

Each exemption, once registered on the PRS Register, is valid for 5 years except for two:

• Where a landlord has recently become the landlord of the property that exemption is only valid for 6 months.
• Where a tenant has withheld consent for energy efficiency improvements that exemption is only valid until that tenant’s tenancy ends (or after 5 years, whichever is sooner).

To read more about MEES here.
Full guidance can be found the Gov.uk website.