Landlords in England and Wales have less than a year to check or improve the energy efficiency of their properties, as by 1st April 2018 the new Minimum Energy Efficiency Standards Regulations take effect.
The new minimum energy efficiency requirements will apply to both the domestic and non-domestic sides of the PRS meaning that whether a landlord is letting out a commercial property or a house to a tenant, it could be unlawful to do so if the building doesn’t meet the new minimum energy standard with EPC rating of ‘E’.
These new regulations also mean that landlords will not be able to give new leases to tenants, even if they are current tenants, if the property has an Energy Performance Certificate (EPC) band rating of F or G.
The new regulations will come into force for new lets and renewals of tenancies with effect from 1st April 2018 and for all existing tenancies on 1st April 2020.
Properties in England and Wales which do not meet the prescribed minimum energy performance standard (MEPS) will be unlawful to be let or leased and their landlords could face penalties of up to £150,000.
A landlord may be exempt from compliance to the new Minimum Energy Efficiency Standards Regulations and therefore able to legally let a property with an EPC below E:
- If third party consent is denied (this could be a tenant, lender, planning authority or higher landlord/freeholder);
- If energy efficiency improvements would negatively impact the value of the property; or
- If all improvements possible at no upfront cost to the landlord have been undertaken, such as through a Green Deal finance arrangement or other specified means of calculating cost efficient works, and the EPC rating still falls below an E.