How to meet landlord minimum energy standards

Everyone deserves a comfortable and energy efficient home to live in. As energy costs keep rising, even while temperatures drop, there is every reason – not least environmental – to ensure properties are well insulated and the energy use is kept to a minimum.

Indeed, in recognition of these issues, the government has assembled guidance for landlords of privately rented property to help them comply with the ‘minimum level of energy efficiency’ standards, which are due to come into play in 2018. In this article we explore the landlords’ energy efficiency requirements to help you to meet the new regulations.

What is an EPC?

The 2015 Energy Efficiency Regulations Act applies to private rental property in England and Wales. It outlines that from April 2018, all non-domestic and domestic private landlords must make sure their properties in these areas meet minimum energy performance standards. These standards are evidenced with an EPC – an Energy Performance Certificate. Landlords must be granted with at least a rating of E before they can permit a tenancy to new or existing tenants.

The impact of changes on non-domestic landlords

Non-domestic landlords , lettings agents or other property management companies can review the government , which provides advice on the scope of regulations and compliance, as well as how to make and calculate the relevant improvements to allow for any exemptions and exclusions.

Why are changes important?

A number of organisations, including Friends of the Earth and Citizens Advice, are in support of these changes, which acknowledge that many rental properties are far more cold and draughty than is acceptable. A great many renters exist in fuel poverty so they are unable to heat their rented homes. Of the 15% of rented housing in England, thousands of these properties are deemed to have unacceptably low band F and G energy efficiency ratings.

Friends of the Earth proposes that if energy bands are improved to a minimum Band E requirement then those households with bands lower than this can save hundreds of pounds a year on energy bills – not to mention the associated reduction in CO2 emissions, which it is estimated would make a saving of around 1.87 million tonnes of CO2 annually*.

The rights of domestic tenants

In a move that empowers tenants to exercise more control over their home environment,

tenants are now legally entitled to request consent from their landlord to install energy improvements in the property they rent from them, which the landlord cannot reasonably refuse.

Tenants must prepare a consent request for their landlord using a formal process so the landlord can consider their request. There are circumstances under which the landlord can decline, in which case the tenant can appeal this decision. The  outlines the detail of the consent request and appeal process.

whether there are any reasons why they cannot make a tenant’s request (these must be from a list of qualifying measures and there are limitations, such as whether tenant or landlord has already given notice on your tenancy). If there are not, then a landlord can consider the energy efficiency measures the tenant would like installed.

How are improvements funded?

Once it’s been agreed that the property is covered by the tenants’ energy efficiency improvement provisions requests, the next step is to pin down which energy improvements are in scope. According to the government literature, the onus is on the tenant to identify a suitable source of funding to cover the cost of energy saving installation. The tenant has the option to seek funding through one of these sources:

  • Green Deal Finance Plan (or the equivalent replacement plan)
  • The Energy Company Obligation (or a similar future scheme)
  • A grant from a local authority, devolved administration or national government.

To fund measures the tenant and the landlord also have the option to draw on their own resources if they so wish.

Insulation grants

The onus for bringing your rental property up to a good standard of energy efficiency isn’t entirely on the tenant, however. As the landlord it’s in your interests to make your property as appealing as possible to tenants and to try to ensure you meet the standard requirements by taking action between tenancies.

Insulation grants are available to the occupiers of rented properties, who are usually also the fuel bill payers. Tenants who are over 70, on a state pension, or in receipt of a tax credit or benefit are unlikely to be asked to make any contribution towards the cost of insulation. Landlords who will directly benefit from the increased value the insulation brings to the property may feel the resale justifies them paying the difference themselves should the tenant not be entitled to free insulation.

Whether you’re planning on insulating an attic in your rental property, or simply draught proofing, be sure to check with your tenants (who experience living in the property day-to-day and are the bill payers) what their preferences are for creating a more energy efficient home.

The  has summarised the government literature very effectively and broken down the process of the tenant’s right to request energy efficiency improvments into useful sections, which are worth reviewing in full for further detail.

Obviously it’s in your interest as a landlord to ensure your property meets the minimum legal specifications, and higher still if you would like to attract tenants for whom a comfortable environment, energy savings and green credentials matter.

As well as taking care of your tenants, of course, one of the most sensible ways to look after your property investment is to ensure you have the right level of  in place. Contact us for a quotation today .

*Which Way Up – Advance Headline Findings, Energy Saving Trust, Feb 2011

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