From 1st October 2008, landlords are required to provide Energy Performance Certificates (EPCs) for their properties including HMOs.
This is a requirement of the Energy Performance of Buildings Regulations 2007 and means that landlords and tenants will have more information about how energy efficient their property is.
Which HMOs need an EPC?
There has been some confusion over how the regulations apply to HMOs, but guidance from Communities and Local Government is that landlords who have an HMO, with shared essential facilities(bathroom, shower, toilet and/ or kitchen) and who have individual tenancy agreements with their tenants do not need to provide an EPC unless they sell the house or let it as one whole dwelling, or convert it to self-contained units.
A mixed property with shared and self-contained units will require EPCs for the parts that are wholly self-contained.
Landlords of completely self-contained flats and those who let houses to a group of sharers (with one contract between all of the occupiers) do need to provide an EPC when they let to new tenants after 1st October 2008.
Update March 2010! – The Government is currently consulting on proposals to extend the requirements for EPCs in HMOs – see information at the bottom of this page.
What exactly is an EPC?
Each EPC has three parts:
- Energy Efficiency Rating – relating to the running costs of the property
- Environmental Impact Rating – relating to the carbon dioxide emissions from the property
- Recommendation report – information on what the landlord (or tenant) could do to improve the rating of the property although landlords are not obliged to act upon any of the recommendations.
We are used to seeing energy efficiency ratings on household appliances such as fridges, freezers and washing machines. The Domestic EPC uses the same A-G rating system where an ‘A’ rating is the most energy efficient and ‘G’ is the least energy efficient.
The average property, at the moment is ‘D’ rated.
The Energy Performance Assessment involves an inspection of the whole property including any loft area and basements, inside and out, together with measurements of room sizes and photographs of key elements. For the most accurate assessment the following details will be required:
- Age of the property
- Model number of the central heating boiler (if any)
- Documentary evidence of any improvements to the property such as double glazing, wall or roof insulation
- Evidence of date and construction methods for extensions/conservatories/re-built areas of the property.
If this information is not available or if there is no access to parts of the property (e.g. the loft) the assessment can still be carried out, but assumptions may have to be made to allow an estimate of certain elements.
How long do EPCs last?
An EPC lasts for 10 years – a landlord don’t need to get a new one for each new let, the same one can be re-used. If changes are carried out to the property which may affect the energy performance such as an extension, loft conversion, installing extra installation, new double glazing etc, a new EPC may be commissioned.
A new EPC will be required if a building is converted to contain a different number of dwellings or units with one EPC needed for each self-contained unit.
A landlord now needs to provide an EPC to a prospective or new tenant who moves into their property after 1st October 2008 (this does not apply to tenants who have been living at a property before this date). The EPC must be free to the tenant, or prospective tenant.
Who can carry out EPCs?
EPCs can only be produced by accredited assessors who have undertaken relevant training and are members of an Accreditation Scheme. These are often surveyors or managing agents who have undertaken relevant training. Landlords should check the accreditation of anyone they commission to carry out an EPC for their property.
You can look for an accredited assessor on the EPC Assessor website.
What are the penalties for not providing an EPC?
The Regulations are enforced by Trading Standards Officers (or Building Control Officers for new build properties) and failure to provide an EPC where the Regulations apply may result in a penalty charge notice of £200. This charge may be applied repeatedly until an EPC is provided.
What are the benefits of EPCs?
- An assessment and EPC will provide landlords and tenants with information about how energy efficient their property is.
- The Recommendation report which forms part of the EPC will give information on what could be done to improve the rating of the property. Ultimately, this could reduce the energy bills for the landlord and occupiers.
- EPCs can be used as marketing tools – tenants will be able to see the energy rating of one potential home over another and may be able to exercise choice over their accommodation.
- There are tax breaks available for landlords in certain circumstances where they install energy savings measures. There is further information in the Energy Savings Trust leaflet ‘Landlord’s Energy Savings Allowance’.
What Changes are the Government Proposing in 2010?
Communities and Local Government has produced a document ‘Making Better Use of Energy Performance Certificates and data’.
The document looks at making better use of EPCs and the data they contain in tackling fuel inefficient homes. The Government wants to clarify when EPCs are required particularly with the sale and letting of buildings and includes the following proposals:
- making better use of EPC data by extending and managing access to data held on the England and Wales domestic and non-domestic EPC registers;
- making better use of EPC data by extending appropriate access to the data to other Government departments and agencies, local authorities, institutions and private organisations and members of the public;
- extending EPC requirements to HMOs. The option favoured by government is to require an EPC for an HMO when a room in the property is first rented out. EPCs extended to HMOs would be valid for 10 years;
- Extending EPC requirements to short-term holiday lets.
The consultation is open until 25th May 2010.
Where can I get more information?
There is more information in leaflets produced by the Government:
- Energy Performance Certificate Guide for Landlords
- Energy Performance Certificates – a more detailed guide for landlords
- Energy Performance Certificates and renting homes: a tenant’s guide
- and also from the Government’s website direct.gov
The Government has also produced a strategy document ‘Warm Homes Greener Homes’