Farming and the Law: Landlords face stricter rules on energy certificates, warns Toby Pound of Barker Gotelee
FOR some years, property owners have been required by law to obtain an Energy Performance Certificate (EPC) to produce to a prospective buyer or tenant.
The purpose of the EPC is to score each property by reference to its energy efficiency with constructive suggestions as to what improvements could be made.
Properties are rated in bands ranging from “A” (the highest rating) to “G”. The residential private rented sector has the largest proportion of “G” rated properties, 5.8% compared with 3.4% in owner occupation. In the business sector, 18% of buildings are rated “F” or “G”.
The need to obtain an EPC has been regarded by most sellers or landlords as an added expense rather than as a useful tool. The impression is that very few buyers or tenants have paid much notice to them. That may be about to change.
The Government recently announced that it will regulate to drive up the energy efficiency performance of the private rented sector. From April 2016, landlords of residential properties will not be able to refuse requests from tenants for consent to energy efficiency improvements where the tenant can obtain financial support under the so-called Green Deal.
The EPC will get even more “bite” from April 2018 when all private rented properties must be brought up to a minimum energy efficiency rating of “E”. It will be unlawful to rent out premises that do not reach this standard. Landlords will fulfil the requirements if their property has reached rating “E” or if they have carried out all available measures for which funding is available under the Green Deal.
Certain properties may be exempted from the private rented sector requirements and the Government will consult. The minimum standards for domestic properties will be enforced by local authorities with powers to impose civil fines of up to �5,000. A local Weights and Measures Authority will enforce the minimum standards for business premises and the level of penalty will be defined in secondary legislation.
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The Government is therefore urging landlords, well in advance of the new regulations, to explore energy efficiency improvements for their domestic or business property stock with the potential for financial assistance under the Green Deal.
The argument is that tenants will benefit from energy bill savings and landlords should see increases in capital values as well as being able to take advantage of void periods to carry out improvements.
Many farmers and landowners rent out property. Clearly, this is an opportunity that needs to be explored.