Does your property meet energy efficiency standards?

Commercial Property Article

20 July, 2015

In July 2014 the Department of Energy and Climate change (DECC) announced their consultation on the proposed minimum Energy Performance Standards (MEPS) for domestic and non-domestic privately rented properties. The responses to the consultation have now been published and are summarised below:

Domestic Properties

From 1 April 2018 properties will need to achieve an EPC rating of 'E' before a new tenancy can be granted to either a new or existing tenant.

From 1 April 2020 all other privately rented property covered under the regulations must achieve the same rating.

The following exemptions will apply:

  1. Cost-effective improvements under the Green Deal's Golden Rule have been carried out but the rating remains below 'E';
  2. Green Deal finance funding is not available due to the Landlord an/or tenant failing the relevant credit checks;
  3. Works will cause a capital devaluation of the property of more than 5% as evidenced by a surveyor;
  4. The Landlord fails to obtain the necessary consents; and
  5. Wall insulation improvements are not appropriate due to the potential negative impact on the fabric or structure of the property.

Non-Domestic Properties

From 1 April 2018 properties will need to achieve an EPC rating of 'E' before a lease can be granted to either a new or existing tenant.

From 1 April 2023 all other eligible properties covered by the regulations must achieve the same rating, including where a lease is already in place.

The following exemptions will apply

  1. Leases with a term of over 99 years or less than 6 months (unless the tenant has occupied the property for over 12 months);
  2. Where the landlord cannot obtain the necessary consents;
  3. Where the measures are not cost effective under the Green Deal's Golden Rule or within a 7 year pay back; and
  4. Where the works will reduce the property's value by more than 5% or where wall insulation will damage the property.

Penalties

These include fines and publication of non-compliance for providing false information, failing to comply with a compliance notice and/or renting out a non compliant property. Fines range from £5,000 to £150,000 depending on the length and degree of breach.

With three years to go it would be advisable for Landlords of privately rented property to assess their current ratings and any cost effective measures to improve the same. Putting these measures in place now will avoid any potential non-compliance and associated fines.

If you require further advice or information on this subject then please contact Adam Bromley by email or call 01772 220189.

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10 Apr 2018

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