The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 introduced two key measures with a view to improving the energy efficiency of private rented properties.
The first is a right for a tenant of a domestic property to make energy efficiency improvements, which has been available since 2016.
The second requires commercial and domestic landlords to ensure that their properties meet Minimum energy Efficiency Standards (MEES). Since April 2018 landlords have been unable to grant new leases without ensuring that their properties meet the MEED of Energy Performance Certificate (EPC) Band E or above, additionally this includes extensions and lease renewals. From 1 April 2020, this will apply to all subsisting tenancies as well.
These requirements have left many landlords with significant expenses in relation to older properties, not to mention the ones not covered by one of the limited exemptions.
To address this issue, the Department of Business, coupled with Energy and Industrial Strategy (BEIS) published a consultation on 19 December 2015 in relation to domestic properties. On 5 November 2018, BEIS reported on the conclusions of the consultation.
BEIS, in light of consultation, has said that amending regulations will apply to the grant of a new tenancy and to an existing tenancy.
• Introduce a cap on landlord expenditure on upgrade works of £3,500.
• Include any investment since October 2017 in that cap.
• Create a new ‘high cost’ exemption to be available where a substandard property cannot be improved to EPC Band E for £3,500 or less, therefore the Landlord will be required to provide 3 installer requests to prove this is the case.
• Remove the current ‘no cost to the landlord’ provision. Curtail existing ‘no cost’ exemptions, both to end by April 2020.
• Remove the consent exemption currently available under regulaton 31(1)(a)(ii) of the MEES Regulations 2015, where a tenant has withheld consent to a Green Deal finance plan.
MEES will be presenting the regulations before Parliment as soon as possible. This will, come as welcome news to many residential landlords who have been struggling to bring their improve their properties.
For more advice these issues please contact Claire-Elaine Arthurs, Property Litigator at gunnercooke
DD: +44 (0) 7791 143 284