There have been discussions and proposals for some time to introduce mandatory energy ratings of homes. This is now being applied across all European Union countries pursuant to the European Directive for the Energy Performance of Buildings, designed to improve property efficiency. In England and Wales, Energy Performance Certificates (EPC) were initially introduced as part of the Home Information Packs required when selling properties. With effect from 1 October 2008, this was extended to rented properties.
Landlords will now need to provide an EPC free of charge to all prospective tenants at the earliest opportunity and no later than:
- when any written information about the building is provided in response to a request for information received from the prospective tenant, or
- when a viewing is conducted, or
- if neither of those occur, before entering into a contract to let.
An EPC does not have to be made available if:
- the seller believes that the prospective tenant is unlikely to have sufficient funds to rent the property, or
- is not genuinely interested in renting that type of property, or
- the landlord is unlikely to be prepared to rent out the property to the prospective tenant (but be sure if relying on this, that your reason is not a discriminatory one).
EPCs, which must be obtained from an accredited energy assessor, are valid for 10 years and do not have to be re-commissioned every time the property is re let (although you may want to if you have carried out works which will improve the energy efficiency of the property). They do not have to be provided to existing tenants.
EPCs are very similar in design to the certificates provided with domestic appliances such as refrigerators and washing machines. Their purpose is to record how energy-efficient a property is as a building. The certificate will provide a rating of the property from A to G, where A is very efficient and G is very inefficient. There are two ratings, the environmental impact rating and the energy-efficiency rating. The environmental rating is a measure of a home's impact on the environment in terms of carbon dioxide (C02) emissions - the higher the rating, the less impact it has on the environment. The energy-efficiency rating is a measure of a home's overall energy efficiency. The higher the rating, the more energy-efficient the home is, and the lower the fuel bills are likely to be.
Current running costs for heating, hot water and lighting will also be shown on the certificate, together with a list of recommended energy saving improvements, which, if taken up, will mean lower energy bills for your tenants. According to Government figures it may be possible to enjoy fuel savings of up to £300 a year or more. Energy efficient homes are much more attractive to potential tenants (who may be prepared to pay a higher rent), both because of the lower running costs and because many tenants nowadays are keen to reduce their carbon footprint.
Note that there are grants available for some types of energy efficient improvement work and you may be able to claim a discount on your income tax bill under the Landlords Energy Saving Allowance.
Failure to provide an EPC is punishable by a penalty charge notice, issued by Trading Standards, carrying a fine of £200.
Landlords seeking advice on EPCs and other energy efficiency matters, can contact the Energy Saving Trust advice centres, telephone 0800 512 012. They are open from 09:00 - 17:00 Monday to Friday. You can find an Energy Assessor online at www.hcrregister.com .
© Tessa Shepperson
Tessa Sheppeson is a solicitor, author, and editor of http://www.landlordlaw.co.uk - an online legal information service for residential landlords and tenants. She also has a blog at http://landlordlaw.blogspot.com