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Changes to EPC legislation – what do you need to do?

Changes to EPC standards of efficiency mean that landlords have a legal obligation to make sure their properties are up to scratch.

Changes to EPC legislation – what do you need to do?

As of April 2018, minimum energy efficiency standards (MEES) are being applied to domestic lettings – this means that your property has to be rated ‘E’ or above in order for it to be let out to tenants.

What’s an EPC?

An energy performance certificate assesses how energy efficient a property is. This can include anything from the use of energy efficient lightbulbs to insulation and hot water systems. The less energy efficient a property is, the higher the energy bills will be. An EPC also shows the potential score for a property, if the recommended changes were made, and an environmental impact rating.

All properties, when being sold or let out, need an EPC. EPCs last 10 years, so they require renewing.

What’s happening and when?

In April 2018, minimum energy efficiency standards (MEES) are being demanded of domestic lettings – a property will have to be rated ‘E’ or above in order to be let out. If you let out your property when it does not meet the minimum standards, you could face a fine of up to £150,000, dependent on the value of the property. If you let out your property without a valid EPC, you could face a £200 fine.

It’s important to get hold of your EPC and check whether your property is up to scratch. If it isn’t, you’ll have to look into the suggestions for improvements in order to raise the rating.

Who does this apply to?

Landlords planning to let their properties out from April 2018 will need to check their EPCs and take appropriate action to ensure their properties meet requirements. If you have current tenants in your property, they can continue living there even if the MEES are not met. However, when you renew a contract, or take on a new tenant, the requirements will have to be met. So it may be worth making the changes even whilst you have tenants in the property, especially if they are planning on renewing their rental agreement.

By 2023 the MEES will apply to current lettings as well as new rental agreements. This means it is in your best interests to make the changes and bring the property up to standard as soon as possible.

What do I do?

Look at your EPC – this will tell you what rating your property is, from ‘A’ to ‘G’. The property needs to be rated ‘E’ or above to be considered appropriately habitable for letting. On the second page of your energy performance certificate, ‘recommended measures’ will be listed. These will show you what you need to do to improve your rating, how big the measures are, how expensive they are, and what kind of difference it will make.

Some recommended measures are simple and quite easy, like replacing bulbs with energy efficient ones. Other actions, like insulating the roof or wall cavities, or updating a boiler system may be more complex or expensive.
When you have made the appropriate changes, to a high standard, you can then get another energy performance certificate, which will register the change in your rating.

Why are the changes happening?

The government is becoming more concerned about ‘rogue’ landlords who are not concerned with the quality of the property they house tenants in. As such, in an attempt to make being a landlord more professional, a number of different initiatives are being brought in. Ensuring that a property is energy efficient not only means that the property itself is being well looked after and is at a decent standard, but that tenants are not spending unnecessarily on high energy bills.

EPCs also register the environmental impact, and with the government’s aim of minimising carbon emissions by 80% by 2050, updating older buildings to make them more environmentally friendly is a good step towards that goal.

How do I meet the Minimum Energy Efficiency Standards (MEES)?

Follow the recommendations on your energy performance certificate. In some cases you’ll be able to undertake the work yourself, in others you may need a specialist. Following the recommended measures fully is not a guarantee that you will reach ‘E’ standard, depending on the state that your property begins in. However, the more work you do to improve, the more likely you are to reach the appropriate MEES.

Will MEES change in the future?

It is possible that MEES could be upgraded in the future, as the expectation for higher standards increases. As such, it makes sense to fully commit to ensuring your property not only meets expectations, but exceeds them, ready for any future change. Whilst you do not have to make these changes immediately (and any change to MEES will be announced with plenty of time) if you are making improvements to your property anyway, it might cause less chaos to do it all at once.

Also remember that whilst MEES will not change in 2023, it will be in place for all existing tenancies, not just new or renewed ones. So even if you have a long term tenant at the moment, by 2023 your property will need to be compliant.

How do I get a new EPC?

It’s very easy to get an EPC! You can use our quote form to find an energy performance certificate assessor in your area. You book the time and they will assess your property, then provide you with a certificate with your rating.

Are there any exceptions to the new rules?

There are some situations in which a landlord would not be fined for failing to reach ‘E’ standard efficiency:
 
  • If carrying out the works would devalue the property by 5% or more
  • The recommended works have been carried out and they did not change the EPC rating
  • The landlord cannot get approval from the mortgage lender to make these changes
  • If the building is listed and the changes would ‘unacceptably alter’ the character or appearance of the property. (However, some listed buildings are exempt from EPCs, in which case they would then be exempt from MEES.)
 
It is important to note a few things about exemption. They must be officially lodged and recorded, with evidence from the landlord on a Government-created online system. If you buy a property that happens to be MEES exempt, that exemption does not pass over to the new owner. You would have to prove the exemption. Finally, exemptions last for around 5 years and then are assessed.
 
 
 
 
 
 

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