Understanding Energy Performance Certificates (EPC) for Landlords

Energy Performance Certificates (EPCs) are a crucial aspect of property management for landlords, influencing both legal compliance and the energy efficiency of rental properties. In this article, we delve into the timeline of EPC regulations, explore the legal responsibilities of landlords, and shed light on the essential details surrounding EPCs.

Current EPC Requirements

In 2018, a pivotal shift occurred in EPC requirements for landlords with the establishment of a minimum energy rating of ‘E’ or above for new tenancies. This mandate extended to cover all tenancies, not just new ones, from April 1, 2020. Additionally, updates to the Minimum Energy Efficiency Standards, initially slated for 2025 and affecting all tenancies by 2028, were proposed in 2021.

All rental properties must have a valid EPC with an energy performance rating of ‘E’ or above to be let legally.

Regulation Changes and Reversals

Despite initial proposals for stricter regulations, in March 2023, the government announced the shelving of new Energy Performance Certificates (EPCs) regulations, with no plans for revisitation. This decision marked the abandonment of proposed deadlines and an increase in penalties for non-compliance. The original goal was to enhance energy efficiency, aligning with the government’s commitment to achieving ‘net-zero’ by 2050.

Understanding EPC

An Energy Performance Certificate provides comprehensive insights into a property’s energy efficiency and carbon dioxide emissions. Obtaining an EPC involves a thorough Energy Assessment Survey, evaluating aspects such as windows, insulation, heating systems, and renewable energy devices. The resulting rating ranges from ‘A’ (most efficient) to ‘G’ (least efficient).

Legal Considerations

Landlords must provide tenants with at least 24-hour notice before conducting an energy assessment, a legal requirement that tenants typically comply with. EPCs are valid for ten years, with renewals necessary only when entering a new tenancy or selling the property. Recommendations in the EPC report offer insights into energy-efficient improvements, with landlords responsible for ensuring compliance.

Meeting EPC Requirements

Landlords without a valid EPC should promptly schedule an Energy Assessment (which should take longer than 40-60 minutes). Compliance with the minimum rating of ‘E’ or above may require suggested improvements, with a maximum spending cap of £3,500, including government grants. High-cost exemptions can be sought if improvement costs surpass this limit.

The Domestic Energy Assessor will perform internal and external inspections to determine how energy-efficient your building is and what possible level of efficiency is achievable if improvements are made.

Some of the things your assessor will take a look include:

• Windows
• Roofs, walls and insulation
• Boilers and heating systems
• Renewable energy devices (solar panels or wind turbines)
• Lighting
• Fireplaces
• Building measurements
• The year the property was built

Once the  assessor has performed a full inspection, they will compile your EPC and grade your property’s energy performance: ‘A’ being the most efficient and ‘G’ being the least.

Exemptions and Tenant Entitlement

Certain properties, such as listed or protected ones, temporary structures, and some industrial sites, may be exempt from EPC requirements. Tenants are entitled to receive a copy of the EPC upon move-in, accessible through the government’s Energy Performance of Buildings Register.

Penalties for Non-Compliance

Properties lacking a valid EPC cannot be legally let, and landlords may face fines of up to £5,000 from local authorities if found non-compliant. Providing tenants with necessary legal documents, including the EPC, is vital for issuing Section 21 notices.

Future Considerations

While the government has abandoned proposed EPC regulations, landlords are encouraged to pursue upgrades for increased energy efficiency. The Boiler Upgrade Scheme grant supports transitioning to greener alternatives.