Under the original 2007 Energy Performance Regulations a landlord or their agent are required to make available, free of charge, a valid EPC to any prospective tenant. There are some exceptions to this rule which included:
“a building that is officially protected as part of a designated environment or because of their special architectural or historic merit where compliance with certain minimum energy efficiency requirements would unacceptably alter their character or appearance”.
Consequently, if landlords or agents are marketing a listed building for rent a valid EPC may not need to be made available. We are aware that there is uncertainty as to whether an EPC is required for listed buildings. The Department for Communities and Local Government (DCLG) takes a somewhat mixed view on this and states that some types of listed building are likely to be exempt. However, not all listed buildings are exempt and the DCLG is reviewing the status of listed buildings.
Minimum Energy Rating
We have had sight of draft guidance material on the 2015 Regulations (produced by the Department of Business, Energy and Industrial Strategy) and the introduction of the minimum energy efficiency ratings due to be implemented in April next year. Our previous post on the 2015 Regulations can be read here.
In summary, the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 set out a minimum level of energy efficiency for private rented property in England and Wales. Specifically, Part 3 of the Regulations contains the minimum level of energy efficiency provisions, which is currently set at an energy performance certificate (EPC) rating of at least band E.
Turning back to the draft guidance, the government’s position appears to be that listed rental properties, and buildings within a conservation area, will not necessarily be exempt from the requirement to have a valid EPC. Where a listed privately rented domestic property, or a property within a conservation area, is required to have an EPC, that property will be within scope of the minimum energy efficiency standards. Accordingly, where the character or appearance would not be altered by compliance with energy performance requirements, an EPC may be legally required and if the landlord is in any doubt about whether to obtain an EPC or not it is their responsibility to seek advice and take the recommended action. The guidance also provides examples of improvements which may alter the character or appearance and they include, include external solid wall insulation, replacement glazing, solar panels, or an external wall mounted air source heat pump.
Where a listed property requires an EPC then they may also be within scope of the minimum energy efficiency standards. However, there are also exemptions to this in the draft guidance. For example, landlords will also not be required to install wall insulation measures where they have expert advice that the measure could have a negative impact on the fabric or structure of the building.
There is also a ‘Third Party Consent Exemption’ which permits a landlord to let a sub-standard property where he can demonstrate that he has been unable to improve the rating of the property to the appropriate standard because they could not obtain the necessary building or listed buildings consent. So a landlord would not be required to make a specified improvement to a listed building where English Heritage will not allow it. However, it appears that exemptions will only apply to the specific recommendations made in the EPC and only to the extent that the recommendations are not permitted. So, a landlord may have to do some of the works set out on an EPC while being exempt from others.
If the exemptions apply then the landlord will be required to register them on the ‘PRS Exemption’ register. The exemption will last 5 years, after which the landlord will again need to consider applying for the necessary consents in order to carry out the recommended energy efficiency improvements, if possible.
There remains a lot of concern over the new minimum energy efficiency standards. The position of listed buildings and the extent of the exemptions is also confusing and not entirely helpful. Hopefully the DCLG and BEIS will do more to clarify their position before these regulations come into force.