As the Government attempts to improve and promote energy efficiency in the private rented sector, more legislation has been brought out, which is likely to catch some private landlords unawares. This is particularly important in rural areas such as ours, where many farm and estate buildings are older, and naturally less energy efficient than newer homes built to modern building regulations.
The new rules were passed in 2015 and amended in 2016, and can be read about in the Government guidance document ‘The Domestic Private Rented Property Minimum Standard’ downloadable from gov.uk. However, the main point of the new regulations is that from the 1st April 2018 it will be illegal for a Landlord to grant a new tenancy that does not meet the minimum level of energy efficiency for private rented property in England and Wales.
Something we learnt from the Deregulation Act last year was that the Government’s interpretation of a ‘new tenancy’ includes not just the moment a tenant moves into a property, but also a renewal of an existing tenancy, and a change from a fixed term tenancy to a statutory periodic tenancy. The legislation states that any property with an EPC rating of F or G will fall foul of these laws. Two years later, on the 1st April 2020, the rules will take into all existing tenancies too, and Landlords will be unable to continue letting a property that has the rating of F or G.
So why are the Government doing this? Recent data shows that there is a disproportionate amount of inefficient properties in the Private Rented Sector. Research has shown that as homes become more efficient, they are void for shorter periods of time (31% less for a band B property than an E or F), colder homes have an average of 2 or more weeks of rent arrears each year than higher efficiency homes. Coupled with this are the obvious benefits to tenants who will receive lower energy bills, and maintain the fabric of the building better, reducing notorious problems like condensation and mould growth.
It is worth noting also that it is not just Assured Shorthold Tenancies that are affected under these rules. Homes let under and Assured Tenancy, a Rent Act 1977 (for example, protected tenancies), and Domestic Agricultural Tenancies will also need to comply. However, there are some exclusions to the rules too. The rules will only apply to the tenancies listed above, where an EPC is legally required. EPCs are not mandatory in a few cases. A building that is officially protected as part of a designated environment or because of special architectural or historic merit, where compliance with minimum energy efficiency would unacceptably alter their character or appearance; Houses of Multiple Occupancy (HMO’s) that have not been sold for the past ten years, nor let as a single dwelling in the past ten years and furnished holiday lets (as defined by HMRC) where the holiday maker is not responsible for meeting energy costs are the exclusions likely to matter in this instance.
Listed buildings may not necessarily be exempt; this depends on whether compliance with minimum energy performance requirements will unacceptably alter its character or appearance; and if there is any doubt then you should check with your local trading standards office.
This is another change in legislation to the Private Rented Sector, and it is getting harder to keep abreast of new rules. That is why we always suggest that you seek the help of a qualified and licensed member of the Association of Residential Letting Agents (ARLA) who are best positioned to advise. We will be communicating with all our existing clients that are likely to be affected by these rules; but if you are a private landlord and would like some advice or reassurance on your responsibilities, do please get in touch with us at Carter Geering on 01363 773757 and have a chat with any of our team or visit our website cartergeering.com.