Looking ahead - change in minimum EPC rating for rented properties

What is an Energy Performance Certificate?
An Energy Performance Certificate ('EPC') does what it says on the tin. It provides information about a property’s energy use and typical energy costs, along with recommendations about how to reduce energy use and save money. The EPC rates the property’s energy efficiency from A (most efficient) to G (least efficient).
Who do you need to give an EPC to?
Property owners need to give an EPC to potential buyers and tenants before you market your property to sell or rent out.
Once you get an EPC, does it have an expiry date?

Yes - an EPC is only valid for ten years.
Is there a minimum EPC rating for rented properties?
At the moment, if there is a valid EPC in place, you cannot let out a property with ratings ‘F’ or ‘G’ unless an exemption applies to your property. However, from 1 April 2018, properties will have to have a minimum EPC rating of ‘E’ for new tenancies (see below for more information). If you let out your property and its rating is less than ‘E’, you will be in breach of the regulations and the local authority can fine you up to £4,000.00.
Can my tenant withhold rent if my property’s EPC rating is less than ‘E’?
No. Breaching the regulations does not invalidate the tenancy agreement that you have with your tenant, so your tenant must still pay their rent.
I currently have a tenant on a fixed term assured shorthold tenancy, due to end in March 2018. I plan to let it roll on a statutory periodic basis from month to month thereafter.  Will I have to comply with these regulations for this tenant?
Yes. The regulations will apply to new tenants of new tenancies and also to existing tenants who have extensions to their tenancies, for example on a statutory periodic basis. The regulations will then apply to all existing tenancies on 1 April 2020. Please do note that all of this legislation is very new and we do not yet know how the county courts will deal with issues on this point. Some of you may remember the issues raised in the famous ‘Superstrike’ case, which questioned whether not you have to serve fresh prescribed information about deposit protection upon the start of every period to a statutory periodic tenancy. The Court of Appeal in ‘Superstrike’ held that you do not have to do so. I suspect that the courts will be persuaded to apply the same logic to EPCs and you will not therefore need to re-serve the EPC every month on a rolling tenancy.
My property’s EPC is less than an ‘E’. What can I do to rectify this?
You will need to rectify this to enable you to rent out your property. You can research your options to improve your property’s EPC rating and I recommend that you do so as early as possible, giving yourself time to achieve the EPC rating well before 1 April 2018. It would definitely be worth saving yourself the scrabble for products and services, particularly following the infamous B&Q shortage of fire alarms upon the change in legislation a few years ago! Please do note that you are only required to carry out appropriate, permissible and cost-effective improvements to satisfy the regulations. You can obtain an exemption from reaching the minimum EPC rating of ‘E’ where you can prove that the works required go above and beyond what is expected of you as a landlord. There are a number of exemptions in respect of property type as well and we can advise you upon these.
For more information, please contact Naomi Newell, disputes solicitor, ncnewell@cozens-hardy.com

To find out more, call us on: 01603 625231