From 1 April 2018, the Government will introduce new energy efficiency requirements for rented homes. This will mean that new Tenancies and renewals of existing Tenancies from 1 April 2018
must have a minimum energy performance rating of “E”. If your property has a rating of “F” or “G”, then you will be letting the property illegally. Penalties enforced by the Local Authority will include a fine of up to £5,000.00 per property
From 1 April 2020, this will apply to all existing Tenancies irrespective of whether they are during the fixed term or periodic Tenancy.
There are a few exceptions, this includes if you are a social Landlord or the property is not a Tenancy but rather a license and some Houses of Multiple Occupation.
In addition, if you have carried out all of the upgrade work, but this is not enough to lift the property above band “F”, then you can claim an exemption. If you cannot get full funding for the upgrade work then you may also claim an exemption. Some listed buildings may be exempt. If you qualify for an exemption, then this must be registered on the National PRS Exemptions Register.
It is worth checking your current Energy Performance Certificate to make sure that it is “E” and above. If it is, then you need do nothing, although note that the certificate is only valid for 10 years so it is worth diarising this. If your Certificate is banded “F” or “G”, then this will require further upgrade work if no exemption can be claimed. It would be wise to have this completed before 1 April 2018 if you are likely to enter into a new Tenancy or renew in the near future otherwise potentially the work can be put off until before 1 April 2020. Note that you will need to factor in additional time to cover the availability of your tradesmen and the time it will take to complete the works.
It is understood that around 330,000 private rented sector homes rated “F” and “G” will be affected by the changes. These are mainly Victorian and Edwardian homes. It is understood that a total of 18% of private rented sector homes were built before 1919 prior to the introduction of cavity wall meaning that they will be hard to insulate.
Further information is contained within the DOMESTIC LANDLORD GUIDANCE published by the Department for Business Energy and Industrial Strategy on 9 October 2017.
For further information, please contact George Smith.