As we know, EPCs have been a part of selling and renting properties for some time now however, following changes to the regulations, minimum standards are to be introduced next year. This means that with effect from 1st April 2018, you will no longer be able to commence any new tenancies or renewals if your property is rated below ‘E’ (this includes statutory periodic tenancies). As from 1st April 2020, the regulations will extend and apply to all existing tenancies too. As it will be unlawful to let properties not reaching the minimum standard, civil penalties will be imposed on landlords.
If your property currently falls below an ‘E’ rating, it is important to consider what changes you will need to make and plan for those works ahead of the applicable deadlines as you will not be able to start any new tenancies and Agents will not be able to market your property – don’t forget as well, that although an EPC lasts for 10 years, if you have works carried out, you will need a new one!
As it is appropriate and cost-effective improvements that are required under the regulations, there will be some circumstances where it is possible to apply for exemption, but you will need to be able to prove one or more of the following:-
That if cost effective improvements are undertaken with no upfront cost to the landlord, the property will still remain below an ‘E’ rating.
You need to obtain a third party’s consent to do the works and that is withheld or granted with unreasonable conditions.
That measures required to carry out the improvements would cause a devaluation of the property of more than 5% - this would need to be evidenced by an appropriately qualified person such as a surveyor from the Royal Institute of Chartered Surveyors (RICS).
There will be an Exemptions Register run by the Government which is planned for 1st October 2017. If exemptions are not registered by the planned date, it will be as if the exemption is not in force and taken as non-compliance with the regulations. Entry on the Register will last for 5 years; following that it will need to be reviewed to see if it is still effective. If not, then the works would need to be carried out.
So, do check your EPCs to see if you’re affected and start planning for any works now so as to minimise voids between tenancies.