Energy Performance Certificates
The European Directive on the Energy Performance of Buildings (EDPB) is a key part of a number of strategies introduced to tackle climate change. The principle underlying the Directive is to make energy efficiency transparent by the issuing of a certificate showing the energy rating, accompanied by recommendations on how to improve efficiency. Nearly half of all carbon emissions in the UK come from buildings so under Article 7 of the Directive, any building which is sold, rented, or constructed must have an Energy Performance Certificate (EPC) issued by a qualified and accredited assessor.
An EPC is comprised of an energy rating on a scale from A (the most efficient) to G (the poorest). It includes 2 charts – the first shows the calculated efficiency rating for the building, (a relative measure compared with pre-defined standards) and the second one, the Environmental Impact Rating, gives the building its C02 rating by measuring the buildings’ energy output in relation to its size.
From the 1st April 2016 tenants have the right to request that their landlords make energy-saving improvements to the home that they rent and landlords cannot refuse consent without good reason. Any property that has an Energy Performance Rating (EPC) of less than ‘E’ must now carry out works to improve it to a rating of E or above, or face penalties of up to £4,000. There are however some instances in which a landlord can refuse permission for improvements to be made, such as the tenant made a request within the preceding six months and the landlord complied.
If the improvement is the same, (or substantially the same), as one which the landlord proposed within the preceding six months but which the tenant either refused or failed to respond to.
Energy Efficiency Regulations
The Energy Efficiency Regulations will come into force on April 2018. From this date new tenancies will not be able to be granted by the landlord. From 2020 landlords will not be allowed to continue to rent out their properties if the performance rating is less than ‘E’ and from 1st April 2023 this will apply to all existing tenancies in addition to any new ones that may be granted. So any rentals that still fall in the ‘F’ and ‘G’performance category will place those landlords in regulatory breach.
These regulations will not however apply to lettings of less than 6 months or long leases above 99 years.
A property will also be exempted if it has:
- a) already had energy saving measures put in place or b) no such measures can be undertaken;
- Third party consent is unobtainable from parties such as planning departments, mortgage lenders, superior landlords or in instances where consent to access the property is not given;
- When any independent surveyor states that such energy upgrades would reduce the property value by more than 5% or cause damage.
Once produced, an EPC is valid for 10 years. This part of the Directive was implemented into law in England and Wales by the Energy Performance of Buildings Regulations (Certificates and Inspections) (England and Wales) Regulations 2007.
Note: Residential properties marketed before the EPB Regulations 2011 came into force can still rely on regulations 5 and 5A of the EPB Regulations 2007. There is no similar grace period for non-residential properties.
The Recast of the Energy Performance in Buildings Directive was translated into UK law under the Energy Performance of Buildings (Certificates and Inspections)(England and Wales)(Amendment) Regulations 2012.
So from January 2013 under this legislation, whilst the onus remains on the ‘relevant person’ (i.e. the seller or landlord) to commission an EPC before marketing, the following are legal requirements:
- Estate agents and other third parties must ensure that an EPC has been commissioned before they can market a property for sale or rent;
- All advertisements for either selling or renting property must clearly show the energy rating of the building. This is not confined to on-line advertising but includes newspapers, magazines and any written material produced by the landlords/estate agents and letting agents. Whilst there is no requirement to display the full certificate if there is enough space, the advertisement should show the A-G graph. It is no longer possible to include only the asset rating;
- The seller or landlord must provide an EPC free of charge to a prospective buyer or tenant as soon as possible with a copy of the EPC also provided to the successful buyer or whoever takes the tenancy;
- The current 28 day period within which an EPC is to be secured using ‘reasonable efforts’ is reduced to 7 days and if after that 7-day period the EPC has not been secured the relevant person will have a further 21 days in which to do so;
- Air conditioning reports must be registered.
The fine for failing to provide an EPC is £200 but for letting agents who don’t display the EPC graph on their window adverts it’s £200 per advert. However the relevant person will not be liable to a penalty charge in a sale or rental if the landlord (who is to provide it) has been unable to obtain it, despite all reasonable efforts. Or, in the case of rental buildings where a prospective tenant was seeking to rent the building in an emergency requiring his urgent relocation, the landlord did not have in his possession a valid EPC at the time of letting.
The landlord should however make it available to prospective tenants as soon as he has it.
Powers of Trading Standards Officers
Trading Standards Officers (TSOs) currently have the power to require the ’relevant person’ (i.e. the seller or landlord) to produce copies of the EPC for inspection and to take copies if necessary. The power to require the production of documents is now extended to include persons acting on behalf of the seller or landlord – e.g. estate agents and letting agents. This means, for example, that TSOs will be authorised to require estate agents to produce evidence showing that an EPC has been commissioned where they are marketing a building without one.
TSO’s also have access to the Landmark Registry where all EPCs are stored.