UK: UK Energy Efficiency Regulations

Last Updated: 5 October 2018
Article by STA Law Firm

Time to Save the World

Looking at the world around us, we can realize just how small we all are. Tiny specs upon the surface of the comparatively large planet, it would seem highly unlikely that we could ever indeed make a substantial impact on the earth. Sure, we can build on it, and we can traverse across it, and we have even got to the point where we can leave the surface and take to the skies and space beyond. However, our potential impact would still seem minimal. The perfect example to demonstrate this is the fact that the deepest humans have dug into the earth's surface is around 12km deep. 12km is around half of the distance through the planets outer crust. We have barely scratched the outer surface, which then lies on top of the 2,900km thick mantel. However, while our impact may seem tiny, there is a particular very well researched and well-known effect which will have result in massive repercussions if no action concerning them occurs; this is indeed referring to the matter of global warming.

The planet is a giant ball of rock, metal, and magma, with other bits and elements strewn around its surface and below its outer crust. It is not exactly a living thing, though upon it are all of the plants and animals we can see. The life that is present is highly dependent on the world and its finely balanced environments and natural conditions. There are indeed fluctuation and changes that occur over millions of years, with it being a known fact that as time passes, there are times of increased temperatures followed by certain ice ages. However, with all the evidence that has been collected by the world's leading researchers and scientists, it has become apparent that the process is speeding up. All of the research is pointing to us humans as being the cause, and so we are slowly but surely making things worse for ourselves and life in general. However, over the last few decades and since we have realized the issue is arising and researched into, we have been making strides to 'save the world'.

The UK's Push

The UK introduced the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (No. 962 2015) on the 26th of March 2015. These regulations aimed to place responsibility on landlords within England and Wales with regards to the energy efficiency of the properties they were putting up for rent. The provisions came into effect on April 1st, 2018, though-Parts 1 and 2 of the law came into force as of April 1st, 2016, and Section 3 came into effect on October 1st, 2016, as mentioned in Article 1, subsection 2 of the legislation. However, the remainder of the law would go into effect this year.

The primary aim of the new legislation is to ensure that Private Rented Properties meet the minimum required energy efficiency standards. If these properties fail to meet the criteria, as of April 1, 2018, they will be considered sub-standard, and will no longer be eligible to be let. Part 3, Chapter 2, Paragraph 23 states this very clearly that in the case of Domestic Private Property, and 23 (2) (a) and (b) further elaborates on this. They stated that as of April 1, 2018, letting the property means to 'grant a new tenancy which falls within section 42 (1) (a) of the Act, or let the property on such a tenancy as a result of a renewal or extension of an existing tenancy'. It further states that from 1 April 2020, any property that does not meet the standard requirements shall not be eligible to be let.

Chapter 3, Paragraph 27 (2) (a) and (b) concerns the eligibility of letting a Non-domestic Private Property, and the situation is similar for the 1 April 2018. However, the property will still be eligible for lease under the specific circumstances beyond 2020. In fact, there will not be a complete ban until the 1 April 2023.

The simple purpose of restricting the letting of properties until they fall in line with the regulations is to ensure that a maximum number of landlords comply with the changes rather than ignore them, while the law is also not wholly forcing them to make the changes. This evolution is not something that is usually looked upon nicely, though the government has seen it to be necessary that the changes occur on a large scale as soon as possible.

Section 30 is rather brief, though it regards the leasing of sub-standard properties. If this so happens to be the case, then the tenancy contract between the landlord and the tenant is no less valid or enforceable. What this ensures is protection for tenants in the situation that the landlord comes under trouble for not attaining the appropriate EPC rating.

One thing to note about the upcoming section (Section 31 (1) and (2)) is that Section 36 (2) states that for any cases of exception, they must register the information set out in the Schedule on the PRS Exemptions Register. That said, Section 31 (1) and (2) relates to specific exemptions and can be brought down to the following.

Section 31 discusses some examples of when exemptions may occur. If during the first five years:

  • The tenant refuses or doesn't consent to the landlord making the changes at present. However, in the end, the landlord does have to make the changes within that period.
  • The tenant refuses to give necessary confirmation which is a must, before any green deal plan with which the landlord proposed to fund the making of the relevant energy efficiency improvement could commence.
  • The tenant refuses or gives the landlord unreasonable demands for them to achieve the requirements.

Another case in which you can register for the exemption is when the devaluation of the property may occur. According to Article 32, if the landlord were to produce a report stating that if the changes were to be made to bring the property in line with the energy efficiency regulations, this would result in a value depreciation of 5% or more.

In the end, only in the case that these properties are entered on to the register can the landlord rely on the exemption.

Chapter 6 of the legislation discusses the penalties. There is stated to be an enforcement authority, and it would be the responsibility of this authority to do the following. Firstly, there are compliance notices. An enforcement authority, should they find that an individual breaches Sections 23 and 27, must serve a compliance notice to them. Within a compliance notice, the enforcement authority must specify:

  1. The address and name of the person whose documents or other information is required;
  2. The date by which they must submit said papers which must be no less than one month from the time they receive the compliance notice.

Following this, the landlord must respond in the following ways:

  1. They must comply with the compliance notice; and
  2. Allow the enforcement authority to take copies of any original document produced.

What will the Impacts of this Law be?

One of the impacts of this new legislation is that all properties must be at least a level E on the EPC scale for it to be eligible to be put up for lease. However, if a landlord is unable to have the changes ready for April 1, 2018, they may have a further six months to get their affairs in order. However, this is not the case under all circumstances; instead, it applies to landlords whose circumstances dictate that they have no other option.

It is vital that landlords begin to make changes and plan for the soonest completion of the alterations to their properties. Any delays may lead to unseen issues arising for property owners which could come back to hurt them in the longer term. While there are exceptions in short to medium term and ways to delay, the changes will be required across the board eventually, and the potential penalties and losses that may rack up as a result of highly unnecessary delays. In the end, the changes are less a move to make money from the government, and instead, they are a more long-term plan in the face of the climate change crisis.

Collaboration with tenants may also be a required move, and this will demand good communication and consent on both parts. The requirement of this collaboration is especially the case when tenancy contracts are lengthier, and the landlord has less flexibility and says on the matter. This collaboration can work both ways, with the landlord or the tenants bringing up the issue though, once again, both parties will require the approval of the other before any work may commence.

The Big Picture

In the end, the changes that the UK government has demanded of the people are for a grander issue. Climate change is occurring, and the human impact on this change is evident. In the past, it was not seen by many governments and authorities around the world as a critical issue due to there being minimal economic gain, though it is now seen by many as a crucial issue which requires attention. The bigger picture can be seen, and this has caused a re-evaluation of sorts. Many would have seen this as inevitable, and while there may be economic demands of the people of the UK, there is potential for future financial returns and the relationships between tenets and landlord could potentially solidify, and the all-around property leasing experience may become more accessible and more satisfying

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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