Private Rented Sector Minimum Energy Efficiency Standards and Tenants Rights October 2016 1
Tenants Rights Provisions From April 2016 tenants right to request energy efficiency improvements came into force in the domestic sector: Tenant may request consent from their landlord to install energy efficiency improvements, Tenant would need to secure funding to cover the cost of the improvements through ECO, grants or the tenant s own sources, Tenants must make written request with evidence to the landlord. Regulations apply where tenants rent on an assured, regulated or agricultural tenancy in England and Wales (Welsh tenancies may change): Landlord may not unreasonably refuse consent to the tenant request, The building does not need an EPC for the regulations to apply, 2
The PRS Minimum Standard From April 2018 privately rented properties in England and Wales will need to reach a minimum Energy Performance Certificate (EPC) rating of E before they can be let (6% domestic properties & 18% non-domestic property currently F/G), Regulations apply to rented dwellings and rented non-dwellings in England and Wales, Buildings in scope of the current EPC regulations or previous regulations are in scope of the minimum standard, Landlord s duty to ensure the property reaches an E EPC rating. 3
Trigger Points Minimum standard to apply in a phased manner: New tenancies to new tenants and existing tenants (where there is an EPC) from 1 April 2018 ( soft start ) All domestic tenancies including occupied property from 1 April 2020 ( backstop ), where there is an EPC. All non-domestic tenancies including occupied property from 1 April 2023 ( backstop ), where there is an EPC. Even when regulations apply to all relevant property (when the backstop commences) the consents exemption may apply e.g. if a sitting tenant refuses consent to improvements or Green Deal finance to pay for them 4
Temporary exemptions... Domestic and Non-Domestic Landlords may be eligible for an exemption from reaching E rating under one of a number of criteria, including where: they can show the property has installed all cost-effective measures (but remains below E); they cannot obtain required consents/permissions for improvement work, or consent is provided with unreasonable conditions; a suitably qualified expert has provided written advice that the measures will reduce a property s value by 5% or more, or that that a measure will damage the property. Compliance with the minimum standard will be enforced by local authorities in England and Wales 5
Minimum Standards Costs Domestic Landlords only required to install those measures which could be installed with no upfront cost/no net cost to the landlord (i.e. fully funded through Green Deal finance, ECO, or other grant funding); With no Green Deal finance currently available in the market, DECC is currently assessing whether any regulatory amendments are required to ensure the domestic standards bite as intended; However, GDFC is being sold to new owner, therefore GD finance is expected to be available again shortly. Non-Domestic Landlord only required to install those measures which can achieve a seven year payback or less (costs include the cost of purchasing and installing them); These costs are linked to the prevailing Bank of England Base Rate, to mitigate for periods of high inflation. 6
The Exemptions Register The Register will... enable domestic and non-domestic landlords to register exemptions against relevant exemption types and upload supporting evidence; provide access to enforcement authorities to enable monitoring and enforcement; allow members of the public to access high level (non personal) data related to exemptions; and enable authorities to publish (non personal) information related to breaches and penalties 7
Enforcement, Penalties & Appeals Domestic: Local Authorities to enforce the provisions, with powers to impose civil penalties Infringement Renting out a non-compliant property Penalty (less than three months in breach) Not exceeding 2,000 Publication of non-compliance Penalty (three months in breach or greater) Not exceeding 4,000 Publication of non-compliance Failure to comply with a compliance notice from a local authority Providing false or misleading information, or failed to comply with a compliance notice 2,000 Publication of non-compliance 1,000 Publication of non-compliance Right to ask Local Authority to review the penalty Where penalty is upheld on review, there's a right to appeal to the First-tier Tribunal. 8
Enforcement and Compliance questions What would energy officers and others involved in enforcement find useful in terms of enforcement and compliance? What data sets exist for identifying landlords within LA areas? How can LAs identify rental properties, and for the first two years (2018-2020) identify the point at which they are let? Exploring ways to assist with enforcement such as combining datasets (EPC Register data, Tenancy Deposit Database data etc), using data from housing teams, Citizens Advice, Shelter etc.? 9
Next Steps BEIS is currently developing guidance, and a central exemptions register, with related work to enable landlords to comply with the regulations; We will be engaging with stakeholders over the coming months to discuss and develop implementation options. PRS Contact details: stephen.ryman@beis.gov.uk 10