What is an EPC?
An 'EPC' is an energy performance certificate. It reveals information about a property's energy use and steps to improve its energy efficiency. Unless an exception applies, a building which has a roof and walls, and which uses energy to condition its indoor climate (i.e. it has heating, ventilation or air conditioning) will require a valid EPC on certain trigger events.
EPCs are usually valid for ten years, but there is no automatic requirement to renew an expired EPC ,except on a trigger event, which B P Collins' property team explores.
What are the trigger events?
The four main triggers are:
- Construction – on practical completion.
- Modification – "to have more or fewer parts than it originally had and the modification includes the provision or extension of fixed services for heating, air conditioning or mechanical ventilation".
- Sale.
- Letting.
Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (the 'MEES Regulations')
One of the main measures introduced by the MEES Regulations is a requirement that a landlord of domestic or non-domestic private rented property must not let or continue to let a property unless it reaches the minimum energy efficiency standard ('MEES') without a 'legitimate reason' (see below).
Currently, a private rented property with an EPC rating of F or G is considered 'sub-standard', and a landlord of such a property may not:
- Grant a new tenancy or extend or renew an existing tenancy of a domestic or non-domestic property on or after 1 April 2018.
- Continue to let a domestic property on or after 1 April 2020.
- Continue to let a non-domestic property on or after 1 April 2023.
A lease of sub-standard property will still be valid and enforceable, but failure by the landlord to comply with the regulations may mean the landlord is liable to civil penalties, which can be financial and/or adverse publicity.
Legitimate reason
One legitimate reason is that an exemption in the MEES Regulations applies. These are:
- Consent exemption – for example, a tenant or a third party has refused consent to the proposed improvement.
- Devaluation exemption – a surveyor has confirmed that making the relevant improvement would reduce the market value of the property by more than 5%.
- Temporary exemptions – in limited circumstances, a landlord can be given six months within which to carry out relevant improvements.
The other legitimate reason permitted by the MEES Regulations is that either the landlord has made all relevant energy efficiency improvements and the property remains sub-standard, or there are no relevant energy efficiency improvements that can be made.
To claim an exemption, the landlord must register itself and submit details (including evidence) to the PRS Exemptions Register. Exemptions are time limited and are personal in nature so cannot be transferred to a landlord's successors in title.
In addition to the exemptions, the MEES Regulations do not apply to certain types or property, tenancy and landlord. For example, they do not apply to a property that does not have a valid EPC or a requirement to obtain one.
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.