The Government has released its guidance on the minimum level of energy efficiency required for privately rented properties.
From April 2018, landlords will no longer be permitted to grant new tenancies, extend or renew a tenancy to an existing tenant if the property has an EPC rating of band F or G.
Where a property is rated band F or G the landlord will need to make improvements to the property to raise the EPC band to a minimum level of E. However, there are exemptions to this which are:
1. the landlord is unable to obtain funding to cover the cost of making improvements; or
2. that all improvements that can reasonably be made have been made, and the property remains below an EPC rating of band E.
Importantly, this means that if a landlord cannot obtain funding to undertake the recommended improvements he will be exempt from meeting the minimum energy efficiency level of band E.
The funding that a landlord may rely on for the recommended improvements can be one of the following:
- A Green Deal Plan;
- Energy Company Obligation or similar scheme;
- Funding provided by central government, local authority or third party at no cost to the landlord;
- A combination of any of the above.
Where funding is available to cover the cost of the suggested improvements, the landlord will be required to undertake them. If funding is not available to cover the whole cost then the exemption applies.
This is because the energy efficiency regulation is based on a principle of ‘no cost to the landlord’, which is why unless funding can be sought entirely for all the improvements, the landlord is exempted from carrying them out.
Where such an exemption applies, landlords will need to register the exemption on the national PRS Exemptions Register.
Luckily for landlords, there aren’t many rented properties that don’t meet the minimum criteria. However, if you are unsure whether your property meets the guidelines, it is worth getting in touch with our lettings team for advice.
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