Minimum Energy Efficiency Standards for Private Rented Property Now in Force
Published on April 10, 2018 by Sarah Mac
As of 1 April 2018, landlords of privately rented domestic and commercial property in England and Wales have a duty to ensure that their properties reach a minimum of an E-rating for energy performance before a new tenancy is granted. This applies to both new tenancies and renewals.
The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 provide for a minimum level of energy efficiency for properties in England and Wales that are privately rented.
When are the Regulations in force?
As of 1 April 2020, the Regulations will apply to ANY privately rented property in England and Wales even when there has been no change in tenancy, and from 1 April 2023 for commercial properties. For domestic properties, the Regulations will be enforced by local authorities, and for commercial properties the enforcing body will be the local weights and measures authority.
After these dates, it will be considered unlawful to rent a property that does not have a minimum of an EPC E-rating, unless there is a relevant exemption. Breaches of the Regulations will result in a civil penalty of up to £4,000.
Landlords with tenancies currently in operation on or after 1 April 2018 whose properties only rate an F or a G will need to make energy efficiency improvements in order to reach a minimum E rating before the property is re-tenanted or an existing tenancy is renewed, or before 1 April 2020 if the existing tenancy is due to run beyond that date. This is all applicable unless the landlord qualifies for an exemption registered with the Public Exemptions Register.
What types of domestic tenancy do the Regulations apply to?
The Regulations apply to the following tenancies:
- Assured tenancies including assured shorthold tenancies as defined by the Housing Act 1988
- Regulated tenancies defined by the Rent Act 1977
- Domestic agricultural tenancies as set out in the Energy Efficiency (Domestic Private Rented Property) Order 2015
What are the exemptions?
The minimum standards for energy efficiency do not apply in the social housing sector. This means that even where one of the above tenancies is in force, the property will be excluded from the minimum standard provisions if it is:
- Low cost rental accommodation as defined under section 69 of the Housing and Regeneration Act 2008 and the landlord is a registered social housing provider
- Low cost home ownership accommodation as defined by section 70 of the Housing and Regeneration Act 2008.
Properties are also excluded if the landlord is registered as a social landlord under Chapter 1 of Part 1 of the Housing Act 1996.
The requirement to meet the minimum level of energy efficiency is not applicable where a landlord has made all the relevant energy efficiency improvements to the property that can be made and the property remains sub-standard. In such cases, in order to be classed as a valid exemption, the situation must be registered on the National PRS Exemptions Register. The exemption has a five year timespan, after which it will expire and the landlord will be required to make further attempts to improve the EPC rating of the property so that it reaches the minimum level of energy efficiency. If this is not possible then a further exemption may be registered.
In addition, where a recommended measure cannot be completely financed without cost to the landlord then it will not be classed as a relevant energy efficient improvement.
The Regulations will not apply if a landlord has been unable to access relevant ‘no cost’ funding to completely cover the cost of installing the recommended improvements. Again, the situation must be registered on the national PRS Exemptions Register.
What properties do the Regulations apply to?
The Regulations only apply to properties that are required by law to have an Energy Performance Certificate. In other words, properties required under the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007, the Building Regulations 2010 and the Energy Performance of Buildings (England and Wales) Regulations 2012.
There is no requirement to obtain an EPC when letting out an individual non-self-contained unit within a property, for example a bedsit or a room in a house in multiple occupation (HMO).
However, the main property that houses the unit may already have its own EPC covering that property as a whole, perhaps because the property was purchased within the past ten years, or because it was previously rented as an entire property.
For properties as a whole that have a valid EPC with a rating lower than E, landlords will not be able as of 1 April 2018 to rent out any non-self-contained units within it until improvements are made to reach the standards.
Where can I find more information?
The following Government resources should prove useful:
Government website – the Private Rented Property minimum standard – landlord guidance documents