Hayley Gaffney of Coodes Solicitors’ Personal Disputes team advises landlords on what could happen should they be found to not be compliant with the new EPC regulations.
New regulations for EPC ratings came into force on 1 April 2018, setting out a minimum level of energy efficiency for rented properties in England and Wales.
An EPC (energy performance certificate) rates the energy efficiency of a property. Ratings start from band A (being the most energy efficient) and end at band G (being the least). Under the new legislation, all privately rented properties must have a minimum energy rating of band E.
From 1 April this year, landlords of domestic rented properties cannot grant a new tenancy if the property in question has an EPC rating below a band E. This requirement also applies to all renewal tenancies to the same tenant for the same property on or after 1 April 2018. The duty is also triggered by any periodic tenancy arising on or after 1 April 2018 after the expiry of any fixed term because this is treated as a new letting for these purposes. And, from 1 April 2020, landlords cannot continue letting a property at all if it has a rating of below a band E.
An EPC is valid for 10 years once lodged on the EPC register and is not required each time there is a change of tenancy, provided the certificate is under 10 years old.
This legislation applies to any rented property, which is legally required to have an EPC and is let under one of a number of tenancy types. These included an assured tenancy, a regulated tenancy or a domestic agricultural tenancy. More information on different types of tenancy can be found here.
There are a number of tenancies or circumstances where the new EPC regulations do not necessarily apply. These include social housing and properties let under licence. There are also different requirements for houses of multiple occupancy let as individual rooms and holiday lets. The rules are complex, so if you are a landlord it is well worth checking whether or not your properties need to comply.
Local authorities have the power to enforce compliance and they may check if a rented property does meet the minimum required level of energy efficiency.
They can issue a Compliance Notice to a landlord requesting information about the EPC rating of the property, and if it is found to be in breach of the regulations, the landlord could be fined. The local authority can also publish details of the breach on the national PRS (Private Rented Property) register.
Financial penalties can differ, depending on the type of breach, but landlords could face a maximum fine of £5,000 per breach per property. If a landlord has been previously fined £5,000 and continues to let the property with a new tenancy without improving the EPC rating, the local authority can levy new penalties for that new tenancy.
Of course, a landlord can ask the local authority to review the penalty notice, and if it is upheld, they can appeal again to the First-Tier Tribunal (General Regulatory Chamber), which handles appeals against decisions made by government regulatory bodies.
If you find yourself in breach of the new EPC regulations, seek legal advice at the earliest opportunity.