NEW LETTING REGULATIONS FOR APRIL 2018 & GOING FORWARD TO 2030 — IMPORTANT CHANGES THAT LANDLORDS NEED TO BE AWARE OF:-
Important changes are being made to the energy efficiency regulations and you need to be aware how this could affect your properties or you could be risking a significant fine.
Are you a private landlord in England or Wales? You need to be aware of the new changes for April 2018 – Heading to a “C” Rating in 2030.
1. What’s changing and when?
As of April 1st 2018 any private sector rental properties will be required to have an Energy Performance Certificate (EPC) with a rating of E or higher. This will apply to new lets and renewed tenancies from April 2018 and will then be applied to existing tenancies from April 2020.
After those dates it will be unlawful to rent a property without a rating of E (excluding some specified exemptions). Landlords found to be in breach of these regulations face civil penalty fine that could be as much as £5,000.
2. Enforcement
Non-compliance with MEES will be enforced by Local Authorities, who can choose which department they wish to use. Typically, this will be either Environmental Health or Trading Standards.
Where an EPC is legally required for a property, local weights and measures authorities (Trading Standards) are responsible for enforcing the regulations requiring an EPC to be made available.
A compliance notice may be served by the enforcement authority up to 12 months after a suspected breach of the MEES regulations and they may request copies of the following information:
the EPC that was valid on the date the property was let the current tenancy agreement used for renting the property any Green Deal Advice Reports relating to the property
Where the Local Authority chooses to impose a fine, the level of financial penalty is at their discretion, up to the maximum limits set by the MEES regulations.
Maximum penalties for non-compliance are as follows:
letting a sub-standard property for less than 3 months – up to £2,000 letting a sub-standard property for 3 months or more – up to £4,000 registering false or misleading information on the PRS Exemptions Register – up to £1,000 failing to comply with a compliance notice – up to £2,000
The total amount of financial penalty per property (and per breach) cannot, under current legislation, be more than £5,000. The above penalties may also be accompanied by publication of the specific breach on the public exemptions register.
The landlord has the right of appeal if he or she believes any of the following apply:
the penalty notice was based on an error of fact or an error of law the penalty notice does not comply with a requirement imposed by the Regulations, OR it was inappropriate to serve a penalty notice on them under the particular circumstances.
In 2030, this regulations will be all lets require a rating of “C” or above.
3. Which properties are affected by the changes?
The new regulations apply to private, domestic rented properties in England and Wales which are let under an assured tenancy or a short hold. The tenancy should be regulated under the Rent Acts including assured agricultural occupancy, protected and statutory tenancies under the Rent Act 1976.
The properties affected are any domestic, privately rented properties which is required by law to have an EPC or is contained within a larger unit which is required to have one. This includes houses, flats and self contained units but isn’t applicable to bedsits. The EPC cannot be more than 10 years old.
3(a). Which properties are excluded?
Protected buildings and structures (such as those with listed status or restricted environmental regulations) are exempt if the measures needed to improve energy efficiency will alter the character or appearance of the building. In addition, temporary structures with intended use times of 2 years or less, residences used for less than 4 months of a year and stand alone buildings with floor area of less than 50 square metres are also exempt.
3(b) Improvement tips for landlords
There will almost always be multiple paths available to bring a Band F or G rated property up to an EPC Band E. In many cases a single measure such as insulating solid walls or updating a heating system will be sufficient to achieve an E rating or better.
There are several simple ways to help improve the EPC rating at little or no cost and these include the following:
Install low energy lighting – this will not increase the EPC rating significantly but swapping existing bulbs is inexpensive and does not require specialist installation Apply draught proofing to old doors and windows Ensure the hot water cylinder is well insulated Retain all documentary evidence relating to any improvements installed. This is particularly important if a property has had a loft conversion or if floor or internal wall insulation has been installed.
Where these installed measures are not visible to the assessor (and therefore cannot be recorded on site) relevant documentary evidence can be used when the EPC is produced.
Heating systems: A common feature of sub-standard properties is the fuel type used. Single rate electricity scores badly therefore properties utilising panel heaters alone will often attract a low rating.
This can be improved by installing High Heat Retention (HHR) storage heaters (and where necessary, changing the meter to dual tariff). At least one HHR heater within a dwelling is required for the EPC to show this as the main heating system.
Existing boiler systems can be improved at relatively low cost by upgrading heating controls.
LPG is another fuel which attracts a poor EPC rating as it has the second highest price per unit in RdSAP. Often the location of the property will dictate the fuel types available but switching to a solid fuel burning system or storage heaters (with a dual tariff meter) will greatly improve the EPC rating.
Wall construction: another common feature of poorly performing properties is wall construction. Solid brick walls in particular will often attract a lower EPC rating than other types such as cavity walls. However, updates to RdSAP in November 2017 (version 9.93) included improvements to the assumed (default) U-values of solid walls. As a consequence this could mean that some properties, which previously scored below band E under RdSAP 9.92, might achieve a higher rating if assessed using the updated methodology.
Cavity wall insulation is sometimes available through funding schemes such as ECO.
4. Are there exemptions?
Guidance issued by DCLG states that an EPC is not required where the landlord can demonstrate the building is any of the following:
A building used as a place of worship and for religious activities
A temporary building with a planned time of use of two years or less Stand-alone (detached) buildings with a total useful floor area of less than 50m²
HMO’s (Houses in Multiple Occupation)- these can be bedsits, hostels, shared houses etc, which have not been sold, or let as a single rental in the previous ten years (note: if an EPC exists for a whole building and it is below band E then the landlord will need to achieve the minimum standard in order to issue new tenancies from April 2018)
Furnished holiday accommodation where the occupancy is via licence and/or the occupant is not responsible for meeting the energy costs Buildings due to be demolished
During 2018/19 this part of the legislation was subject to a Government review and the outcome of this means that the landlord is, from 1st April 2019, required to contribute towards the cost of energy efficiency measures, subject to a spending cap. Receipts to show that up to £3,500 (inclusive of VAT) must therefore be retained and submitted to prove that this amount has been spent on energy efficiency measures prior to being able to apply for an exemption on grounds of expenditure.
4b Understanding MEES Trigger Points
Until 1st April 2020, it is a change to a tenancy which is the ‘trigger’ point for MEES compliance. Expiry of an EPC alone does not have any direct impact on a currently tenanted dwelling. It is therefore important to understand the various scenarios which trigger the requirement for a landlord to comply with the MEES regulations.
If a tenancy changes, and the most recent EPC lodged on the Central Register has a rating of F or G, MEES will be triggered and the landlord is required to comply with the regulations. For the purposes of MEES, a tenancy change occurs when:
The property is let to a new tenant on a new tenancy agreement
The current tenancy agreement is extended by way of a formal agreement between the landlord and tenant
The property is re-let to an existing tenant on a new fixed-term tenancy agreement (i.e. the tenant signs a new fixed-term tenancy agreement when the current agreement expires)
The current tenancy agreement expires but an existing tenant continues to occupy the property without signing a new tenancy agreement (commonly referred to as ‘rolling over’ or ‘holding over’). At this point the original fixed-term tenancy expires and the law automatically grants a new periodic tenancy
An additional tenant moves into the property, requiring an amendment to the tenancy agreement, or a tenant is removed from an existing tenancy agreement meaning that the tenancy is taken on by the remaining tenant(s)
The original tenant sub-lets the property to a sub-tenant (in which case it is the responsibility of the original tenant to ensure the property is MEES compliant as they become the ‘landlord’).
5. How to Improve the Energy Efficiency of a Property
There are several improvements you can make to a property which will improve the energy efficient rating and many are very quite simple to carry to out. You could improve the energy efficiency of your property significantly by:
Replacing a non-condensing boiler with a new condensing, A rated boiler with over 90% energy efficiency.
Installing or improving insulation in walls, roof, loft spaces, pipework etc. to prevent heat loss. You may even be able to qualify for a free insulation grant to help with the cost.
Installing solar panels and a solar energy storage system to reduce the property’s energy dependence on the National Grid. This will be key to helping properties achieve the “C” rating in 2030.
Installing double glazed windows to reduce the amount of heat escaping through poorly fitted frames or basic single glazing.
IOW EPC SERVICES CAN OFFER HELP AND ADVICE REGARDING THESE REGULATIONS – CALL 01983 639070