EPC Letting Requirements
Regulations change all the time and those for renting properties are no different. Here are the 3 essential certificates a landlord must have for each property.
- Annual gas safety certificate – has to be renewed annually
- Electrical Installation Condition Report or EICR for short – has to be renewed every 5 years.
- An Energy Performance Certificate or EPC – has to be renewed every 10 years.
All are important but the EPC is the one that is mostly overlooked and is often only highlighted when something goes wrong whilst letting the property. For example, a landlord can’t evict a tenant under a Section 21 notice without a valid EPC. For a landlord it’s like driving a car with no insurance, you can get away with it for years but when something goes wrong, even if it wasn’t your fault, and then suddenly you’re the one foul of the law because you weren’t legal anyway.
When is an epc required?
A valid epc is required for all rental properties. Previously it was only required when a new tenant moved into the property. Since April 2020 it is required also for all existing tenancies. In addition the rating of the EPC must be at least at E39. Have a look at our post about EPC rating. If the property is an F or G, the property cannot legally be let. The landlord would have to make some of the improvement recommended on the EPC certificate to bring it up to the minimum legal requirement.
All properties with a valid EPC are kept on a government register at https://find-energy-certificate.digital.communities.gov.uk/. You can check here to see if you have one and if it’s valid. Fines of up to £5,000 can be issued for any non compliances.
What to do if your property is an F or G rating
The main reason a property is likely to be an F or G is because the property is using an expensive form of fuel to heat the property such as peak rate electric or LPG and it has poor insulation such as in the walls or roof. The combination of these two factors will result in a poor EPC rating.
So it goes without saying that these are the two areas that are going to need addressing. You may only have to make improvements to either the insulation or the heating, depending on how far you are away from that E39. If you are more than 8 points short of the mark then it’s probably going to have to be both.
Don’t guess which improvements to do but get qualified advice from a Domestic Energy Assessor. Get an up to date EPC done to see where you are on the rating scale. The cost of an EPC is usually under £75. The Assessor can then run different scenarios in the software to see which improvements will get you to pass at the lowest cost therefore avoiding you making any unnecessary upgrades. Your Assessor may charge you to provide the different scenarios but this is going to be well worth it as you will know the exact outcome before you undertake any improvements.
Minimum Energy Efficiency Standards (MEES)
The rules governing the requirements that landlords have to meet is called the Minimum Energy Efficiency Standard. Under this regulation all rental property must have an existing registered EPC of at least an E rating or a valid exemption on the PRS register. There are 7 exemptions that could possibly applied for and they are:
- High Cost Exemption. Where a recommended measure is not a “relevant energy improvement” because the cost of purchasing and installing it would exceed the £3,500 cap (inc. VAT). Other improvements would still need to be made up to the maximum expenditure that the landlord needs to make.
- Where all relevant improvements have been made and the property remains below an E
- Where the property is below EPC rating E and there are no relevant improvements.
- Wall insulation – where insulation to the walls could have a detrimental effect on the property.
- Third party consent exemption. Where consent cannot be gained from a 3rd party to enable the work to be done.
- Property devaluation exemption.
- Temporary exemption due to recently becoming a landlord.
All the above exemptions would still need documented proof to support the application for an exemption to be registered.
These regulations are not meant to be burdensome on the landlord but the landlord needs to be seen to be taking steps to meet the regulations. A qualified Domestic Energy Assessor will be able to give advice and support in meeting the regulations and applying for an exemption if required.