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Legislative Changes Relating to Energy Performance Certificates (EPC)

Legislative changes introduced under The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 relating to the EPC will be effected from 1 April 2018, which will affect future property sales and leases and may impact your scheme property. We have previously reported on this matter but the deadline is now looming.

 Energy Performance Certificates and the associated reports set out the energy efficiency rating of a property, and contain recommendations for ways the efficiency of the property can be improved. Properties are currently rated on a scale from A to G, A being the most efficient rating a property can obtain. There are some exemptions to the new rules depending upon the type of building held.

The changes

Currently for a property to be marketed for sale or to let an EPC must be provided, however there is no minimum rating required. From 1 April 2018, in order to market or lease a property, it must obtain a minimum rating of E on the EPC. Should the property be an F rating or below, it is the landlord’s duty to carry out the works to improve the energy efficiency rating of the property.

It is important to note, this will only affect properties which are to be marketed for sale or to let. Any properties with tenants in situ will not be affected at the time of writing. Albeit, in 2023 the proposed legislation will apply to existing leases as well.

Potential fines for failure to comply

Should a property be found to be let at the substandard energy rating, then fines will be imposed on the pension scheme as follows:

  • Property let for less than three months: higher figure of £5,000 or 10% of the rateable value of the property, capped at £50,000.
  • Property let for more than three months: higher figure of £10,000 or 20% of the rateable value of the property, capped at £150,000.

Failure to provide an EPC with the minimum E rating when marketing the property for sale, could lead to the enforcement authority imposing a financial penalty of up to £5,000, and a publication penalty.

 Next steps

From 1 April 2018 should a pension scheme be actively marketing a property for sale or to let, and the energy efficiency ratings fall below ‘E’ then the pension scheme will need to ensure works are carried out to improve the rating of the property to the required level. If the property rating is already above ‘E’ then there is nothing further to do.

To find out how Taylor Patterson can help you please call Kerry Houghton on 01772 550614 or email Kerry.houghton@taypat.co.uk

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