A Continued Focus on Energy Efficiency

It is a legal requirement for an Energy Performance Certificate (EPC) to be produced when a property is sold or rented out (it should be obtained before the property is marketed).

EPCs show the energy efficiency of a building and must also include recommendations for cost-effective improvements that could be made to the property to improve its energy efficiency. The government initiative behind EPCs is to incentivise property owners or occupiers to improve the energy efficiency of their buildings.

On 1 April 2016 the Energy Efficiency (Private Rented Sector) (England and Wales) Regulations passed into law. They set the minimum energy efficiency standard at an ‘E’ EPC Rating.

– Tenants of a residential property are now permitted to request the landlord’s consent to making energy efficiency improvements. The Landlord is not permitted to unreasonably withhold consent, even if there are restrictions on alterations in the Lease. The Regulations do not impose a positive obligation on Landlords to carry out the improvements

– Landlords of residential and commercial property will need to demonstrate compliance with the Regulations, failing which a Landlord may not:

i. grant a new tenancy, extend or renew an existing tenancy of a property on or after 1 April 2018;

ii. continue to let a residential property on or after 1 April 2020; or

iii. continue to let a commercial property on or after 1 April 2023.

A Landlord may not be required to comply with the minimum standard if it can demonstrate that they are exempt. Any exemption should be registered on a centralised register.

The penalty for non-compliance may be up to £150,000.00.