With effect from 1 April 2018, it will be illegal to let or lease a residential or commercial property with an Energy Performance Certificate (EPC) rating below “E”.
All properties are given an energy efficiency rating of A-G, A being the most efficient and G the least.
How do the regulations affect you?
The energy efficiency of a building for the purposes of the regulations is based on CO2 emissions which are detailed on the graph displayed on the front page of the EPC certificate.
It is a legal requirement on the sale or on the grant of a lease of a property to produce an EPC to the prospective buyer or tenant.
It is important to note that a prospective tenant should never be charged for requesting an EPC. The obligation is strictly on the landlord to provide an EPC at his or her own cost.
Failure to comply with a request to produce relevant documents from an enforcer (such as the department of finance and district councils) may result in a penalty charge notice. However, if you compare this to the cost of obtaining an EPC, it is safe to say the more viable option is to obtain the required EPC as soon as possible to avoid any future penalties. In most cases, an EPC will be valid for 10 years.
What are the advantages of obtaining an EPC?
As a landlord, the production of an EPC may help to make your property more marketable where your property achieves a high energy rating. Of course the opposite will apply should your property be inefficient. You could increase the marketability of the property if the energy efficiency is improved.
The costs associated with improving the energy efficiency of a property such as installing wall insulation can prove to be minimal when compared to the increase in marketability of the property once these works have been carried out.
Are they any exceptions?
The regulations are subject to some qualifications.
Landlords need only carry out works to their property which are cost effective and permissible.
Should a landlord provide evidence of this and the property still falls below a rating of E, then this property will be exempt from being penalised.
Furthermore, if a tenant was to withhold consent (where a lease stipulates tenant consent is required to carry out works) or the works required are assessed by a surveyor to cause a devaluation of the property, then once again the property will be exempt from penalisation.
These provisions should not be relied on, and a landlord is well advised to do everything it can to firstly check and then to correct a rating below the minimum standard which will be required in just a few months time.
If you are still unclear about how these changes will affect you please contact one of our specialist commercial property solicitors. Tanuja Sellahewa is a Senior Associate Solicitor in our Commercial Property team and can by reached by phone at 01483 215033 or by email [email protected].