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Energy efficiency improvements - can a landlord say no?

From 1 April 2016, landlords of domestic properties have been unable to unreasonably refuse consent to a tenant's request to carry out energy efficiency improvements. What does mean for landlords?

What are "energy efficiency improvements"?

To qualify as an "energy efficiency improvement", the works must either:

  • Be a measure for improving efficiency in the use of energy in the property, and be listed in the Schedule to the Green Deal (Qualifying Energy Improvements) Order 2012. This Schedule is lengthy and includes measures such as roof insulation, replacement glazing, lighting systems, fittings and controls, and under-floor heating or insulation, or
  • Be a measure installed for the purposes of enabling the supply of gas through a service pipe to the property where the property is not fuelled by mains gas and is situated within 23 metres from a relevant main of a gas transporter.

Most importantly for landlords, even if works satisfy one of these criteria, they will only qualify as "energy efficiency improvements" if they can be financed at no cost to the landlord. The Regulations state that works will only be a "relevant energy efficiency improvement" where the cost of the improvement:

  • Can be wholly financed, at no cost to the landlord, by means of funding provided by central government, a local authority or any other person,
  • Can be wholly funded by the tenant making the tenant's request, or
  • Can be wholly financed by a combination of the above, and Green Deal finance or works provided free of charge pursuant to an obligation imposed by an order under the Gas Act 1986 or the Electricity Act 1989.

The key point for a landlord is that it cannot be forced to consent to energy efficiency improvements that will involve it incurring expenditure.

Can all tenants make a request to carry them out?

The Regulations enable tenants under both short term arrangements (most commonly Assured Shorthold Tenancies) and long leases to make a request to the landlord to carry out energy efficiency improvements. Sub-tenants can also make requests. In such cases, the superior landlord's consent, in addition to the immediate landlord's consent, must be obtained.

There are certain circumstances in which a tenant cannot make a request. These include:

  • Where the tenant, or the landlord, has served notice to end the tenancy,
  • Where the landlord has commenced proceedings for breach of covenant, and
  • Where the tenant has entered into an agreement to transfer the tenant's interest in the property (this will apply to long leasehold interests).

Does a landlord always have to consent?

A landlord does not necessarily have to consent to the works but, despite this, may have to jump through a number of hoops to show that it has considered the request.

Firstly, the landlord will need to consider whether the tenant's request is valid. Is the tenant entitled to make a request? Does the request satisfy the requirements of Regulation 8? For example, the request must be accompanied by evidence of funding.

If the tenant is entitled to make a request, and that request fits the requirements of Regulation 8, the landlord must not unreasonably refuse consent to the making of the improvements. The Regulations set out are various circumstances in which consent will not be unreasonably refused. These include:

  • Where another tenant submitted a request in relation to the same premises within the preceding six months and the landlord complied with the Regulations in relation to that request. The Regulations simply state that the request must have related to the same premises; not the same works.
    Therefore, if a landlord received a request from Tenant 1 to carry out one type of works, and the landlord complied with the Regulations (with regard to the timing of service of a response etc) on that occasion, the landlord can refuse consent without it being unreasonable if it receives a request from Tenant 2 to carry out works within six months of Tenant 1's request. This appears to be the case regardless of whether the works being requested by Tenant 2 are the same or similar to those requested by Tenant 1.

  • Where the landlord obtains a report that the improvement is not appropriate due to its potential negative impact on the fabric or structure of the property, or the building of which it forms part;
  • Where the landlord sought the tenant's consent to the same or similar improvements within the preceding six months and the tenant refused to give consent; 
  • Where third party consent cannot be obtained; and
  • Where the works would result in a devaluation of the property. 

A superior landlord is also under a duty not to unreasonably refuse consent to an application.

However, even if the landlord is entitled to refuse consent, it will still have to provide a full response to the tenant. This must set out on what grounds it is refusing, within one month of the date of service of the tenant's request. 

If the landlord fails to do so, the tenant can apply to the First Tier Tribunal on the grounds that the landlord has failed to comply with the Regulations. If the First Tier Tribunal finds that the landlord has failed to comply with the Regulations, it can make an Order granting consent to the making of the improvements specified in the request. 

This seems rather heavy handed, and it would be surprising if the First Tier Tribunal would make such an Order in circumstances where the landlord was just a little tardy in responding to the tenant's request, but nevertheless had a valid reason for refusing to grant consent.

Nevertheless, landlords should ensure that they do not ignore tenants' requests for consent to carry out energy efficiency improvements.

When the Regulations were passed, the intention was that tenants would be able to obtain finance via the Green Deal or funding provided by other government schemes. This would have left a fairly small number of situations where tenants had to meet the costs themselves. But, as Green Deal funding was withdrawn in 2015, it is likely that the instances of tenants making requests to landlords to carry out works, which the tenants are going to have to self-finance, will be limited.

Contributor: Alexandra Holsgrove Jones

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at February 2016. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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