Energy Performance Certificate for Residential Landlords: Compliance and Exemptions

When residential landlords decide to market a property for sale, rent, or after implementing modifications within the last decade, obtaining an Energy Performance Certificate (EPC) becomes essential. This also applies to properties that are let on an assured tenancy, regulated tenancy or domestic agricultural tenancy.

However, it’s important to highlight that having an Energy Performance Certificate in place isn’t the sole obligation. The Domestic Minimum Energy Efficiency Standard Regulations (MEES) dictate that these properties must meet a minimum efficiency level. Since April 1st, 2020, residential landlords are prohibited from letting or continuing to let properties governed by MEES unless their Energy Performance Certificate rating surpasses a specified threshold. The current threshold for EPC rating must be at an E or higher. Failing to adhere to these regulations may lead to the issuance of a compliance notice followed by substantial fines.

In this article, we provide insights that every residential landlord should possess concerning these changes impacting Energy Performance Certificates.

How do residential landlords verify the rating of their properties?

It’s quite common not to have information about whether your property has an existing Energy Performance Certificate (EPC) or what its current rating is. This information can be easily checked at no cost by using the EPC register. 

What is an Energy Performance Certificate necessary?

The EPC serves to provide recommendations for enhancing a property’s energy efficiency. Environmental considerations are also shared by both landlords and tenants regarding their property’s impact. Furthermore, properties with lower energy efficiency could incur elevated utility expenses as a result of the poor energy rating.

Consequences of a Residential Landlord’s Property Rating being below E

Should the property receive a rating of F or G, landlords are required to undertake measures to increase the rating to E or higher. This is applicable when a landlord intends to let the property, excluding cases where the property remains unoccupied.

Enhancing the energy efficiency of a property can result in substantial expenses. To address this, a cost cap of £3,500 (inclusive of VAT) has been established. In some circumstances, even with this allocated budget, achieving an E rating might not always be attainable for certain properties. In such scenarios, landlords are advised to implement all feasible improvements within this budgetary limit and subsequently seek an exemption.

Given that not all landlords may have the financial means to execute these enhancements, the government has outlined multiple options in their guidance on how to navigate this situation. This guidance can be visited by clicking here. 

Are there exemptions available for landlords?

In cases where achieving an E rating is unfeasible, landlords have the option to seek an exemption. Such exemptions are registered through the PRS Exemptions Register. This can be due to circumstances where property improvements fail to lift the rating to E or above. Additionally, if even the most economical recommended measures exceed the £3,500 budget, exemptions can apply.

Several other exemption scenarios exist. For instance, if obtaining third-party consent (such as from a mortgage provider) proves impossible despite earnest efforts, an exemption may be warranted. Another exemption might pertain to instances where executing energy efficiency measures would diminish the property’s value. Furthermore, landlords who have recently entered the field can apply for temporary exemptions.

These exemptions, however, are intricate in nature. We strongly recommend close attention to the regulations and seeking legal counsel when necessary. In certain cases, obtaining a surveyor’s report might be essential to substantiate the claimed exemption.

How can our Dispute Resolution team help?

Navigating the complexities of Energy Performance Certificate (EPC) requirements and exemptions can be daunting for residential landlords. Our dedicated dispute resolution team is here to offer guidance and support throughout the process. Whether you’re seeking clarification on regulations, assistance with exemptions, or expert advice on compliance, our team is ready to assist you.

You can contact our Dispute Resolution team by calling 01302 341414 or 0114 272 1884, alternatively, you can fill out our online enquiry form to ensure you’re well-informed and equipped to meet your EPC obligations effectively.