From 1 April 2018, it will be unlawful to let a property with an EPC rating of below E unless an exemption applies.
The government has issued guidance for landlords of non-domestic properties on how they can ensure that they comply with the requirements. But does this guidance clarify all of the issues?
The Energy Efficiency (Private Rented Property)(England and Wales) Regulations 2015 (widely referred to as MEES) state that a property falls below the required energy efficiency level where the valid EPC for the property shows that the property has a rating of below E.
Under MEES, an EPC is valid where it is less than 10 years' old and no other EPC for the property has since been entered on the register.
However, the guidance contains a section on Voluntary EPCs which seems to conflict with this.
The guidance states that if an EPC is obtained where a trigger event (such as the sale or letting of the property) has not occurred, this will not mean that the landlord has to comply with MEES. So, if the landlord obtains an EPC simply because the last EPC was undertaken more than 10 years' ago and it wants to keep abreast of the EPC ratings of its portfolio, but it is not doing anything that would trigger a requirement to commission an EPC, it will not have to comply.
Whilst that may be sensible, the guidance goes on to say that: "Where a voluntary EPC has been registered on the database it will supersede any earlier EPC that may have existed for the property, but official registration of a voluntary EPC will not, in itself, require the landlord to comply with the minimum standard."
This is at odds with MEES. It could also result in the situation where the later EPC is the valid EPC for the property (as it has displaced the original one), but the original EPC is the one which determines whether the property complies with MEES.
The guidance seems to have rather muddied the waters on this point.
The MEES provide that, where a tenant's refusal of consent has prevented the landlord from carrying out energy efficiency works, the exemption (if registered) lasts for five years. The guidance is clear, however, that the exemption will expire earlier if that tenancy comes to an end before the end of the five year period.
This had been discussed in the run up to the publication of the MEES but did not seem to have been followed through into them. However, the guidance makes it clear that this is the intention.
We will be sending out further legal insights on topics such as buying a substandard property, and other practicalities of dealing with MEES, over the coming weeks. You can also find further information on MEES on our hot topic page.Contributor: Alexandra Holsgrove Jones
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at February 2017. Specific advice should be sought for specific cases. For more information see our terms & conditions.