What do April ’12 changes to EPC’s mean to us as landlords?

For those who think “More legislation to make life difficult for landlords” let’s first look at why Government need us to have Energy Performance Certificates (EPC’s).

When fossil fuels are used they emit carbon dioxide (CO2), which is known as a “greenhouse gas” (GHG) because it helps produce something called the greenhouse effect. This traps UV rays from sunlight in our atmosphere bouncing them back and forth from our atmosphere to the ground heating up the earth, increasing global warming. Climate change is one of the major challenges facing everyone on this planet and GHG emissions are recognised to be responsible for this change. Every country in the world must play its part in reducing carbon emissions and each country must identify ways that they can do this.

UK Government had no statistic upon which to base its future plans and, in October 2008, the EPC was born in order to gather accurate information and to raise awareness of the amount of fuel that was being used.

This is the timescale for the future of EPCs in relation to letting property

• From 6^th April 2012 a new style certificate will be used
• From 2016 a tenant will be entitled to ask the landlord to carry out the measure recommended on the EPC and the landlord will have a legal obligation to do so
• From 2018 it will be illegal to let a property which has an EPC rating below E

Let’s look at what landlords, because we are the “relevant person”, and Agents acting on our behalf, need to do in order to comply with our legal obligations under the Energy Act of 2011 and changes to The Energy Performance Of Buildings (Certificates And Inspections) (England And Wales) Regulations 2007 (The EPB Regulations).

1. We must all have an EPC assessment carried out on any property that we are going to offer for let or sale this must be commission before we begin to market the property the onus to do this remains on the ‘relevant person’ (the seller or landlord).

2. We must show every prospective tenant the EPC at the viewing to enable them to assess the cost of fuel that they will use if they take the property.

3. We must give a copy of the EPC to each tenant at the start of the tenancy so that they have a permanent record to keep.

4. Before 2016 we should all carry out measures recommended by the assessor on the EPC and have the property re-assessed and re-rated to show that we have done so, this is not a legal requirement but it will enable us to have work carried out as part of planned maintenance and when the property is unoccupied if we choose to do so.

5. By 2016 we must be prepared to carry out any outstanding measures if the tenant requests us to do so and there is a finance package available because this will be a legal requirement.

6.  By 2018 it will be illegal to offer a property to let (or for sale) unless we have raised the EPC rating to E or above or above if it is possible to do so according to the Energy Assessors recommendations on the EPC.

7.  It is recognised that there are some properties that will not reach an E rating and the Energy Assessor will note this on the EPC and a note of the highest possible rating will also appear.

As long as we comply with all the recommendations on the EPC it will be legal to let properties that cannot be brought up to the minimum standard. The new rating will be noted on the revised EPC and a potential tenant will be therefore be aware that the property may be expensive to heat – this may
have an impact on a landlords ability to let the property as more tenants become sensitive to fuel costs.

8.  At the moment there are many free and low cost measures being offered to landlords and tenants, including insulation for single brick buildings, and we should all explore what is available to us before they are withdrawn when Green Deal replaces them. A phone call to the Energy Saving Trust is all it takes to find out what is available in your area.

9. Green Deal is a scheme to help us to improve the energy efficiency of our properties at no cost. I will write another piece on the details of Green Deal in the coming weeks and I will tell you the benefits of using this scheme and the issues that are concerning landlords. There are many Chinese
whispers about Green Deal so it is important that landlord understand the facts in order for us to make commercial decisions.

10. EPCs carried out before 6^th April 2012 will continue to be valid until their expiry date. The new style EPC will be used from April 2012 will have

• a single energy efficiency graph on the front page;
• significantly reduced text;
• clear signposting to the Green Deal;
• an indication of which recommendations could be funded through the Green Deal;
• greater focus on potential financial savings;
• recommended improvements nearer the front of the document;
• text of less immediate interest moved to the back page.

11. Those who carry out the EPC assessment will need to be re-accredited before 6^th April in order for the EPC to be valid and landlords will need to ensure that their Assessorhas that new qualification.

12. The duty to commission an EPC before marketing will be extended to the sale and rent of residential and non-residential buildings.

13. The current 28 day period within which an EPC is to be secured using ‘reasonable efforts’ will be reduced to 7 days;

If after that 7 day period the EPC has not been secured the ‘relevant person’ will have a further 21 days in which to do so.

14. Trading Standards Officers (TSOs) currently have the power to require the ‘relevant person’ to produce copies of the EPC for inspection and to take copies if necessary. The power to require the production of documents will be extended to include persons acting on behalf of the seller or landlord – estate agents and letting agents. This means, for example, that TSOs will be authorised to require agents to produce evidence showing that an EPC has been commissioned where they are marketing a property without one.

This amendment is intended to remove the erroneous belief that the provision of the EPC can be delayed until shortly before the parties enter into a contract for sale or rent. This will be achieved by deleting the words “before entering into a contract to sell or rent the building or, if sooner” in Regulation 5(2)(b) of the EPB Regulations.

15. Currently, for residential sales only, the ‘relevant person’ or his agent is under a duty to either attach the EPC to written particulars or include the asset rating on those particulars. The amendments will require the EPC to be attached to written particulars in relation to buildings sold or rented out. The option to include the asset rating will no longer apply.

The existing definition of ‘written particulars’ will be expanded to ensure that particulars produced for rented buildings and commercial properties are captured by the new requirements. The requirement will only extend to the first page of the EPC (the EPC consists of two pages, accompanied by four pages of recommendations)

16. As an exception to this requirement, provision is made to allow the person subject to the duty to provide the written particulars to omit the address of the building from a copy of the EPC
where the address has been omitted from those particulars.

17. The requirement to lodge air conditioning inspection reports on the central Non Domestic EPC Register will become a statutory requirement, replacing the current voluntary approach.

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