On 26th March 2015, new energy efficiency regulations were passed in law relating to the private rental sector in England and Wales. These regulations are better known as Minimum Energy Efficiency standards (MEES).
While the majority of these regulations will not apply until 2018, tenants can make requests directly to Landlords from 1st April 2016, as such, property owners must be making early provision to meet the new requirements.
What Are The new Regulations?
Under the MEES, rented properties will be evaluated and receive a EPC (Energy Performance Certificate), rating from A to G, with A being the most efficient to G being the least efficient. With effect from April 2018, it will be a requirement for privately rented properties to be rated “E” or better.
From the above date, where a “domestic private rented property” has an EPC rating of F or G a Landlord will be unable to grant or renew a tenancy agreement unless they can demonstrate that an exemption applies or they have undertaken the relevant energy efficiency improvements.
Existing tenancy agreements may remain in force until 1st April 2020, following which a landlord may no longer continue to let out non-qualifying properties.
As mentioned above, with effect from 1st April 2016, tenants may make a request on their landlord for energy efficiency measures. Such requests may not be reasonably refused, with this in mind we would suggest that property owners take the appropriate action in advance of this date to maintain control over the process and any associated cost.
Penalties and Enforcement
Significant penalties are in place for non-compliance and Trading Standards Officers will be empowered by local authorities to enforce the new rules. Should they suspect that a landlord is not compliant (or has not received the required exemption), they may serve a compliance notice requesting further information or simply proceed in issuing a penalty notice.
An initial fine of up 10% of the rateable value may be imposed subject to a minimum £5,000 and a maximum £50,000 penalty. Continued non-compliance for 3 months or more will trigger further increased penalties of 20% of the rateable value (minimum £10,000 and a maximum of £150,000).
While landlords will have the ability to appeal any penalty notices, it is anticipated that local authorities will take a tough stance to ensure a high level of compliance.
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