What do April ’12 changes to EPC’s mean to us as landlords?

by Mary Latham

12:23 PM, 5th March 2012
About 8 years ago

What do April ’12 changes to EPC’s mean to us as landlords?

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What do April ’12 changes to EPC’s mean to us as landlords?

Landlords EPCFor those who think “More legislation to make life difficult for landlords” let’s first look at why Government need us to have Energy Performance Certificates (EPC’s).

When fossil fuels are used they emit carbon dioxide (CO2), which is known as a “greenhouse gas” (GHG) because it helps produce something called the greenhouse effect. This traps UV rays from sunlight in our atmosphere bouncing them back and forth from our atmosphere to the ground heating up the earth, increasing global warming. Climate change is one of the major challenges facing everyone on this planet and GHG emissions are recognised to be responsible for this change. Every country in the world must play its part in reducing carbon emissions and each country must identify ways that they can do this.

UK Government had no statistic upon which to base its future plans and, in October 2008, the EPC was born in order to gather accurate information and to raise awareness of the amount of fuel that was being used.

This is the timescale for the future of EPCs in relation to letting property

  • From 6th April 2012 a new style certificate will be used
  • From 2016 a tenant will be entitled to ask the landlord to carry out the measure recommended on the EPC and the landlord will have a legal obligation to do so
  • From 2018 it will be illegal to let a property which has an EPC rating below E

Let’s look at what landlords, because we are the “relevant person”, and Agents acting on our behalf, need to do in order to comply with our legal obligations under the Energy Act of 2011 and changes to The Energy Performance Of Buildings (Certificates And Inspections) (England And Wales) Regulations 2007 (The EPB Regulations).

1. We must all have an EPC assessment carried out on any property that we are going to offer for let or sale this must be commission before we begin to market the property the onus to do this remains on the ‘relevant person’ (the seller or landlord).

2. We must show every prospective tenant the EPC at the viewing to enable them to assess the cost of fuel that they will use if they take the property.

3. We must give a copy of the EPC to each tenant at the start of the tenancy so that they have a permanent record to keep.

4. Before 2016 we should all carry out measures recommended by the assessor on the EPC and have the property re-assessed and re-rated to show that we have done so, this is not a legal requirement but it will enable us to have work carried out as part of planned maintenance and when the property is unoccupied if we choose to do so.

5. By 2016 we must be prepared to carry out any outstanding measures if the tenant requests us to do so and there is a finance package available because this will be a legal requirement.

6.  By 2018 it will be illegal to offer a property to let (or for sale) unless we have raised the EPC rating to E or above or above if it is possible to do so according to the Energy Assessors recommendations on the EPC.

7.  It is recognised that there are some properties that will not reach an E rating and the Energy Assessor will note this on the EPC and a note of the highest possible rating will also appear.

As long as we comply with all the recommendations on the EPC it will be legal to let properties that cannot be brought up to the minimum standard. The new rating will be noted on the revised EPC and a potential tenant will be therefore be aware that the property may be expensive to heat – this may
have an impact on a landlords ability to let the property as more tenants become sensitive to fuel costs.

8.  At the moment there are many free and low cost measures being offered to landlords and tenants, including insulation for single brick buildings, and we should all explore what is available to us before they are withdrawn when Green Deal replaces them. A phone call to the Energy Saving Trust is all it takes to find out what is available in your area.

9. Green Deal is a scheme to help us to improve the energy efficiency of our properties at no cost. I will write another piece on the details of Green Deal in the coming weeks and I will tell you the benefits of using this scheme and the issues that are concerning landlords. There are many Chinese
whispers about Green Deal so it is important that landlord understand the facts in order for us to make commercial decisions.

10. EPCs carried out before 6th April 2012 will continue to be valid until their expiry date. The new style EPC will be used from April 2012 will have

  • a single energy efficiency graph on the front page;
  • significantly reduced text;
  • clear signposting to the Green Deal;
  • an indication of which recommendations could be funded through the Green Deal;
  • greater focus on potential financial savings;
  • recommended improvements nearer the front of the document;
  • text of less immediate interest moved to the back page.

11. Those who carry out the EPC assessment will need to be re-accredited before 6th April in order for the EPC to be valid and landlords will need to ensure that their Assessorhas that new qualification.

12. The duty to commission an EPC before marketing will be extended to the sale and rent of residential and non-residential buildings.

13. The current 28 day period within which an EPC is to be secured using ‘reasonable efforts’ will be reduced to 7 days;

If after that 7 day period the EPC has not been secured the ‘relevant person’ will have a further 21 days in which to do so.

14. Trading Standards Officers (TSOs) currently have the power to require the ‘relevant person’ to produce copies of the EPC for inspection and to take copies if necessary. The power to require the production of documents will be extended to include persons acting on behalf of the seller or landlord – estate agents and letting agents. This means, for example, that TSOs will be authorised to require agents to produce evidence showing that an EPC has been commissioned where they are marketing a property without one.

This amendment is intended to remove the erroneous belief that the provision of the EPC can be delayed until shortly before the parties enter into a contract for sale or rent. This will be achieved by deleting the words “before entering into a contract to sell or rent the building or, if sooner” in Regulation 5(2)(b) of the EPB Regulations.

15. Currently, for residential sales only, the ‘relevant person’ or his agent is under a duty to either attach the EPC to written particulars or include the asset rating on those particulars. The amendments will require the EPC to be attached to written particulars in relation to buildings sold or rented out. The option to include the asset rating will no longer apply.

The existing definition of ‘written particulars’ will be expanded to ensure that particulars produced for rented buildings and commercial properties are captured by the new requirements. The requirement will only extend to the first page of the EPC (the EPC consists of two pages, accompanied by four pages of recommendations)

16. As an exception to this requirement, provision is made to allow the person subject to the duty to provide the written particulars to omit the address of the building from a copy of the EPC
where the address has been omitted from those particulars.

17. The requirement to lodge air conditioning inspection reports on the central Non Domestic EPC Register will become a statutory requirement, replacing the current voluntary approach.



Comments

20:35 PM, 3rd April 2012
About 7 years ago

Just another way the Government is using to try justify high taxes on fuels.
Tim Fawcett

13:59 PM, 8th April 2012
About 7 years ago

hi mary
i agree with tony atkins but i will give you more on boilers when i have time
it is curious that the government is not imposing EPCs on home owners and local authorities makes you question their motives and their commitment to reducing green house gases doesnt it
on the subject of waste and pollution you may be interested in the enviromental impact of the 6th april changes to tenancy deposit regulation. Based on government statistics on the number of private rented tenants and the number of documents that the law requires to be served on every relavent person UK landlords will need to print and send 534 million pages of documents and use and dispose of 8million nine hundred thousand ink cartridges in 2012 alone i wonder what that will do to green house gases and landfill as 90% of these documents will go straight in the bin
i have done a three page A4 letter (printed on both sides to save paper) to all my tenants any one who contributed and the parents of student tenants which i have put in with all the tenancy deposit documents .In this letter i have given these figures exactly how they were arrived at and what can be done by the government to reduce this mindless waste to virtually zero
the response i have received is mind blowing people a very angry at this sensless waste
we could seriously embarass the government on this one 
if you would like a copy of this letter let me have your email
regards
tony altman
ps excuse my typing

18:35 PM, 8th April 2012
About 7 years ago

It is about time that email addresses are an accepted way of receiving legal documents such as these deposits documents.
The other advantage is that emails may be filed away and don't get lost.
Emails are a very convenient filing cabinet
Plus as you have mentioned it would save the 534 million pages and 8 million ink cartridges.
These new regulations have thrown up the unintended consequences of the supposed green savings.  and new legal requirements to give deposit info to relevant parties.

Mary Latham

13:08 PM, 9th April 2012
About 7 years ago

Tony, I would very much like to see that letter but if I post my email address on this thread I will no doubt get some unwelcome emails - would you please send it to the email of P118 and ask them to forward it to me.

Mary

Mary Latham

13:11 PM, 9th April 2012
About 7 years ago

Paul I think you may be getting mixed up with the document that must be given for deposit protection.  The only documents you need to give for EPC is the one that the assessor gives you.  This document cannot be sent by email because it must be shown to every prospective tenant at the viewing so that they can make an informed decision about taking the property while knowing the cost of fuel bills.  When they take the tenancy the document should be given to them for their records.  You need just three copies.  One for showing, one for your records and one for the tenant.

17:44 PM, 9th April 2012
About 7 years ago

Yes I see; it just seems that are unerring amounts of paperwork that needs to be produced for tenancies.
There appears to be the legal necessity of producing these things in paper form only.
With 4.2 million tenancies
The amount of trees etc that this paperwork costs must be enormous.
So much fro the paperless office predicted in the 70's!!?

17:10 PM, 18th April 2012
About 7 years ago

Just think of the records that could be accessed.
LHA payments
Council Tax
Utility companies
Electoral regiser

Yes Ms Latham, I see you are another of these authoritarian types who just loves being able to access people's personal business. Wow, Big Brother lives! The EPC must be an absolute dream-machine for you. And may I ask just exactly what you think will happen to properties in F and G come 2018, when they become supposedly "unsellable"? Bring in the bulldozers? Board em up? Condemn the owners, who may be on no or poor incomes, to remain forever trapped in their "disgraceful" houses? Or will you forcibly kick em out and house them in a council flat, courtesy of the tax-payer?

I feel sorry for all you fools who have fallen for the global warming scams, getting your heads filled with Brussels trash on carbon emissions, footprints, energy efficiency, all the stuff that governments have wanted you to swallow hook line and sinker.
Bullying homeowners into spending money on certificates, green bling and other measures that in the main do very little for them or their bills.
I was quoted over £5000 for double-glazing, that would "save" me a mere £60 a year on energy bills.  It doesnt need a genius to work out the payback time on that. I could save £60 just by switching the heating off.
You will all soon find out that it's been a huge con. Until then, dream on about your Big Brother database and Energy Utopia.

20:11 PM, 18th April 2012
About 7 years ago

I think you have got the wrong end of the stick.
The Green Deal as far as it relates to residential property, ONLY relates to rental property.
Homeowners will NOT be required to meeet EPC standard A- E.
Therefore the ONLY people who will be concerned about these new regulations are LL and tenants.
There are 682000 rental properties that do NOT meet the minimum EPC E standard.
If by 2018 the minimum E standard is NOT achieved the rental property will HAVE to be withdrawn from the property market.
This means the tenant will have to be thrown out and the LL will be left with an unlettable property
So the LL will have a property that could only be sold to a residential occupier as any new LL would have to have the EPC E standard works carried out before the property may be re-let.
There may well be lots of LL distressed sales if the works have not been carried out.
There is the other situation whereby a tenant may request  the EPC E standard to be achieved and a LL is not allowed to refuse such a request.
So if you are a tenant in a property that does not presently meet the E standard you could in 2016 insist the woeks are carried out and the LL may not refuse.
If the LL tries to evict on the basis that the tenant wanted the E standard to be achieved it would be unlikely the judge would agree.
Though of course Section 21 may get around this.
The risk for the LL is the next tenant may make the same request.
So the answer for LL is to get the works carried out ASAP.
The earliest time this may be achieved is Oct this year.
So BIG BROTHER is only a problem for LL and tenants NOT homeowners.
Hopefully your mind has now been put at rest.;  just pity the poor old LL who yet again is having to do things which impact on the amenity of a rental property whilst works are being carried out.
My advice to ANY LL whose property does not meet the min EPC E standard is get the works carried out as soon after OCT as you can.
682000 properties is a lot of work for builders to carry out.
There are not enough to do this work unless works are commenced now.
It should be a bonanza for buildrs and suppliers for the next few years, and ALL of it will be paid for up front by the government.
You do NOT want to leave to the last possible moment when you will be highly unlikely to source a builder; they will be as rare as hen's teeth!!
No works done = unlettable property and reduced capital value.
After all if someone came along and said I am going to give you £10000 to make your property more energy efficient, but also you have no choice in the matter, what will you do!?
But with the advantage that you the LL does not have to pay a penny towards the cost of the improvements.
Plus there will be an uplift in the capital value of the property.
You could easily see a situation where LL will actively seek out properties that do not meet the EPC E standard knowing that the govt will pay for improving the property at no cost to the LL.
So if you are a property owner whose property does not meet the min E standard you will find LL out there ready to bite your hand off to buy such a property.
This as the LL will be getting the govt to improve the property at ZERO cost to the LL which will make the property a better rental proposition.

Mary Latham

20:56 PM, 18th April 2012
About 7 years ago

Krisuk May I suggest that you READ what I have written before making inaccurate and rude personal remarks.  I do not make the law I look for solutions for landlords and tenants who are affected by changes in legilsation because I want the private rented sector to be a good place for good tenants to live and good landlords to thrive.

When  I get angry I do not waste it ranting on fora like this I get off my backside and go out and direct my anger where it might do some good I also offer a reasoned alternative point of view.

You might also read Paul Bs reply before embarrassing yourself further.

14:31 PM, 23rd April 2012
About 7 years ago

Hi Mary - I was just reading the on the Directgov website on EPC's and found the following information:-
When you'll be given an EPC
By law you should receive an EPC in the following cases:Buying a home
All sellers of homes need to ensure that they provide an EPC, free of charge to potential buyers.Buying a newly built property
Buyers of newly built properties should receive an EPC, free of charge.Renting a property
If you are interested in renting a property, the landlord must make an EPC available to you free of charge. However, you don’t need an EPC when you are thinking of just renting a room with shared facilities rather than renting the whole property.If you are not in one of the above categoriesEven if you don’t fall into the above categories, you can still apply for and receive an EPC from an energy assessor. This may be because you want to know how energy efficient your home is, and make improvements suggested by the recommendation report. Read ‘Energy Performance Certificates - what they are’ to find out more about what an EPC contains.My reading of this information is that if I let one of my HMO's as a whole houses (e.g to a group of students) then I will need to get an EPC for that property, but if I am letting an HMO by rooms then I won't.  Is this also your understanding?  I'd be grateful if you could clarify.

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