Energy Performance Certificates (EPCs) – New Requirements regarding the Grant of New or Renewal of Leases from 1 April 2018

The legislation for Energy Performance Certificates (EPCs) has been in place since 2008 and provides that an EPC is required if a property is marketed for rent (as well as sale).  However the Energy Efficiency (Private Rented Property) England and Wales Regulations 2015 will bring phased minimum energy efficiency standards (MEES) into force which may make it harder to rent out a property.

MEES will apply only to assured, assured shorthold and rent act tenancies and not, therefore, to properties rented to companies or non-Housing Act tenancies.  The first phase of MEES came into force in April 2016, and provided that tenants can request landlord consent (which cannot be unreasonably withheld) for improvements listed on the EPC to be completed.

The significant change from 1 April 2018, is that it will be unlawful to grant new, or renew, leases with an EPC rating of less than ‘E’ and from 1 April 2020 that provision will apply to all let properties.  Landlords with properties that have an EPC rating of less than ‘E’ will need to carry out works to improve the energy performance of the building to a rating of ‘E’ or higher, or they will face civil penalties albeit there are certain exemptions.

It will be sensible for all landlords to consult their agents or surveyors at the earliest opportunity to consider the implications of this legislation for any properties they may own and thereby establish a practical action plan so that any work that may be necessary can be spread over a reasonable period.