Do you have an up to date, E rated EPC for all of your rental properties?
On 1st April 2020, the government is making some significant changes to the rules regarding Minimum Energy Efficiency standards – and it’s essential that all your properties meet the new regulations.
In this post, we explore what is happening, and what landlords need to do before April to ensure their properties are compliant.
MEES and EPC – The Changes
The government is looking to improve the energy efficiency of rental properties for the benefit of tenants.
As part of this process, it is further tightening the MEES (Minimum Energy Efficiency Standards) from April 1st 2020. From that point, every rental property must have an EPC rating of E or above – regardless of when the tenancy began.
This is a natural extension of the legislation introduced in April 2018, preventing landlords from letting out or renewing the tenancy on a property rated F or G on the EPC. It is the natural culmination of a programme started in 2008 – when the initial legislation requiring every buy to let property to have an up to date EPC before being rented out.
In practice, it means that landlords need to have an EPC rated to E or above for all their existing tenancies by 1st April this year – or they risk being in breach of the legislation.
If properties don’t meet this standard – they need to bring them up to code before this date.
Non-compliance – The Penalties
There are stiff penalties in place for landlords whose properties do not meet the MEES standard. If a local authority believes a landlord has failed to fulfil their obligations, they can serve the landlord with a compliance notice. If a breach is confirmed, the landlord may receive a financial penalty.
The maximum penalties apply per property (up to a total of £5,000 per property), and are:
- Up to £2000 for renting out a non-compliant property for less than 3 months
- Up to £4000 for renting out a non-compliant property for more than 3 months
- Up to £1000 for providing false or misleading information on the PRS Exemptions Register
- Up to £2000 for failing to comply with a compliance notice
In addition to the financial penalty, the local authority will publish information about the nature of the brief publicly.
As part of the new legislation, landlords must make every effort to meet the MEES standard. However, there are some exemptions to this new legislation, including:
- High costs – where the cost of making improvements to bring the property up to an E rating exceeds £3,500+VAT
- Wall insulation exemption – where installing cavity wall installation, external wall insulation or internal wall installation would negatively impact the fabric or structure of the building
- Third party consent exemption – where you need consent from another party, such as a tenant, superior landlord, mortgagee, freeholder or planning department, and this consent cannot be obtained
- Property devaluation exemption – where making the recommended energy efficiency improvements would devalue the property by more than 5%
Landlords must apply for an exemption, and this usually lasts 5 years. Full information about the exemption legislation can be found at https://www.gov.uk/guidance/domestic-private-rented-property-minimum-energy-efficiency-standard-landlord-guidance#registering-an-exemption.
At CJ Property, we can provide tailored advice on the best way forward to ensure that your portfolio complies with the new standards.
Checking Your EPC
We have already begun contacting our ‘managed property’ landlords who have rental properties with an EPC rating that is lower than E – and are suggesting the changes they need to make to improve efficiency and ensure compliance.
If you manage your property yourself you can check the status of their EPC at the following website –https://www.epcregister.com/reportSearchAddressByPostcode.html .
Proactive Property Management from CJ Property
At CJ Property, we’re committed to looking after our landlords and to providing the best possible levels of service and value.
Our expert team is at the forefront of the industry, and we’re here to keep you updated about all the upcoming changes to relevant legislation. Providing a proactive service, our mission is to ensure you are always prepared and armed with the information you need to make the right decisions for your portfolio.
For additional information on any of the upcoming changes, or to talk to a member of our expert property management team, please call 01482 645270 today