Energy Performance Certificates(EPC) Serice For Landlords

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Introduction

  • Nearly half of all carbon emissions in this country come from buildings
  • Any building which is sold, rented out or constructed must have an EPC. This must be issued by an Independent, qualified and accredited assessor
  • The principle is to make energy efficiency transparent by the issuing of a certificate showing the energy rating, accompanied by recommendations on how to improve efficiency
  • Once produced an EPC is valid for ten years
  • The certificate is accompanied by recommendations on how to improve energy efficiency, these do not however have to be implemented

EPC Requirements

From the 1st October 2008, an EPC will be required whenever a building in the social or private rented sectors is let to a new tenant.

Landlords must provide an EPC free of charge to prospective tenants at the earliest opportunity and must provide a copy of the EPC to the person who takes up the tenancy. The purpose of the EPC is to show prospective tenants the energy performance of the dwelling they are considering renting

EPCs are valid for 10 years and can be reused as many times as required within that period.

It is not necessary to commission a new EPC each time there is a change of tenant. However, once a more recent EPC has been produced for a dwelling, it will always supersede an existing one. Thus, where a number of EPCs are obtained for a property within the ten year period only the most recent one is valid.

An EPC is not required for any property that was occupied prior to 1 October 2008 and which continues to be occupied after that date by the same tenant. However, landlords may commission EPCs for these dwellings if they wish.

The EPC shows two things - the Energy Efficiency Rating (relating to running costs) and the Environmental Impact Rating (relating to the carbon dioxide emissions) of a dwelling. Each rating is shown on an A-G rating scale similar to those used for fridges and other electrical appliances. The rating is accompanied by a recommendation report that shows how to improve the dwelling's energy efficiency. These two elements together form the EPC and the complete document must be provided to the new tenant. There is no statutory requirement to carry out any of the recommended energy efficiency measures stated in the recommendation report.

Existing EPCs

If a landlord already has an EPC for a property, for example because it was recently purchased and the EPC was part of the Home Information Pack, this EPC can be used for the subsequent rental. EPCs are valid for 10 years from the date of its production for rental purposes but only for 12 months if it is to be used for a HIPs related sale.

Enforcement

An authorised Trading Standards officer (TSO) has powers to ask a landlord who appears to be or to have been under a duty in the regulations to produce for inspection an EPC and recommendation report if the TSO suspects that an offence has been committed.

This might occur, for example, if a prospective tenant complains that they have not been given access to a copy of the EPC, or if the tenant does not receive the EPC when he takes up the tenancy.

If the landlord has failed to provide an EPC to a tenant, or fails to show an EPC to an enforcement officer when asked, Trading Standards can issue a notice with a penalty charge of £200 per dwelling. In addition to paying the penalty notice, the landlord will still have to provide an EPC to the person who has become the tenant.

Dwellings in Multiple Occupation

Where individual rooms in a building are rented out and there are shared facilities (eg kitchen and/or bathroom), an EPC is not required. This because an EPC is only required on the rental of a building or part of a building designed or altered to be used separately. Renting a room does not meet the 'part of a building' definition.

An EPC is only required for a habitable unit if it is self-contained. This is therefore different to the requirement for Decent Homes inspections, where units which are not self-contained must be individually assessed. Landlords should be aware of this when holding EPC and Decent Homes data in common asset management databases.

Landlord Responsibilities

The landlord must provide the whole EPC (including the recommendations report) free of charge to the new tenant.

The landlord should advise the tenant that the estimated running costs

  • are based on standardised consumption (number of occupants/hours of heating per day)
  • take into account costs for heating, hot water and lighting only and do not include the cost of appliances
  • are based on average fuel prices current when the EPC was produced.

There is no obligation on the landlord to carry out any of the measures indicated in the EPC. Tenants can act on the behavioural advice (eg turning down a thermostat). Typically it is likely to be the landlord who carries out physical improvements

The potential rating is based on the adoption of all of the cost-effective measures. These are separated into lower cost measures (up to £500) and higher cost measures (over £500). In some cases, adopting a measure may improve energy efficiency but may not be sufficient for the dwelling's energy rating to improve by a whole band.

Although a measure may improve the dwelling's energy efficiency, it may not be cost effective for the landlord to replace existing equipment that is relatively new like a boiler. Furthermore, even if a dwelling has the potential to be improved, the landlord is under no obligation to do so.

The Further Measures section includes measures those who are very keen to invest in energy efficiency may want to consider, but which are considerable investments with long payback times (over seven years). Tenants need to understand what these mean and that it may not be realistic to expect a landlord to install these measures.

Financial Assistance

The incentives to install energy efficiency measures are different between the rented sector and the owner occupied sectors. In the rented sector, the tenant has most to benefit from improvements to the energy efficiency of their property (a warmer home, lower bills) but the landlord is likely to be the person who would make (and pay for) those changes. However there are a number of schemes available which may contribute toward the cost of improvements to a building that are designed to increase its energy efficiency.

FAQs

When do the obligations for rented dwellings come into force?
1 October 2008

Where does the 10 year validity period come from?
The requirement for an EPC is driven by the European Union legislation, which includes a provision that the validity period of EPCs should not exceed 10 years.

Can a landlord charge a tenant for the provision of an EPC?
It is not permitted for the landlord to charge for the provision of the original EPC. However it is permissible for a tenant who has already received the EPC to be charged for the provision of a copy document.

Is it possible to amend and update an EPC without the need to commission a new survey?
A DEA who issues the EPC would need to be satisfied that it accurately reflects the energy performance of the property. The DEA may be satisfied through means other than a full survey.

Is it always the building owner who is responsible for producing the EPC? What if the building owner has no direct relationship with the tenants?
Where a tenant sub-lets a dwelling, the responsibility to make an EPC available lies with the sub-leaseholder.

Who has access to the EPCs on the Domestic Register?
Only an individual who has the unique reference number for the EPC in question, has the right to access an EPC on the Domestic Register. However, the accreditation scheme responsible for the particular EPC, the enforcement authorities and the Department for Communities and Local Government will also have access to the EPCs.

Is it possible to advertise a property before the EPC has been produced?
There may be occasions when it is possible to offer a dwelling for rent before the EPC is available. However this should not be the norm. The landlord will be expected to have made contact with a DEA and commissioned the EPC with a view to receiving it within two weeks of the date it was commissioned.

If an EPC is being produced when the dwelling is empty, what impact will occupying tenants have on the accuracy of the energy and environmental ratings?
The occupying tenant will have no impact on the EPC ratings, as these are produced using standardised occupancy data (ie number of occupants and hours of heating per day).

What if the tenant wants to buy the dwelling they already occupy? Can I use the same EPC as I used when they took the tenancy?
If the tenant wants to purchase the dwelling they rent, the same EPC can be used. This is because it is a non-marketed sale not affected by the HIPs Regulations. An EPC is required but this can be up to 10 years old. However, if the dwelling is also being placed on the open market, the EPC must be no more than 12 months old because it is affected by the HIPs Regulations.

What happens if I need to get an EPC to advertise the property, but I am going to improve before the new tenant moves in?
Either explain to the tenant that improvement works were carried out since commissioning the EPC and so the dwelling's energy efficiency rating may now have changed, or commission another EPC after completion of the improvements.

Will I have to issue an EPC if I have a lodger in my house?
Letting a room within your household does not constitute a rental of a building or part of a building therefore an EPC is not required.

How much will they cost?
The cost of an EPC varies slightly depending on the size and complexity of the property.

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