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Energy Performance Certificates (EPCs)

Guidance and changes to EPC regulations
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As part of a European Directive, it is mandatory to hold an Energy Performance Certificate (EPC) if you intend to sell or rent your property. As the UK government looks to further reduce environmental damage, minimum standard regulations changed on April 1st 2018.

Energy Performance Certificates were introduced to provide a purchaser or a potential tenant with similar information relating to a property’s energy ‘costs’ and therefore play a crucial role when selling your property.

What are Energy Performance Certificates?

EPCs provide information on a building’s energy efficiency using a sliding scale – ‘A’ being the most efficient, ‘G’ being the least efficient. In addition to the Energy Efficiency Rating (relating to running costs), the EPC will also show the Environment Impact Rating (relating to the carbon dioxide emissions). An EPC report will make recommendations of how you can improve the rating of your property, however, there are no statutory requirements to carry out any of the recommended energy efficiency measures.

That said, as per the new ‘Minimum Energy Efficiency Standards’, if your property doesn’t have a minimum ‘E’ rating, it will be unlawful to rent it out. Research has also found that global warming is one of the two issues people are most concerned about (the other being terrorism). With domestic properties being identified by the government as a major contributor to greenhouse gas (GHG) emissions, the new regulations on minimum energy efficiency are incredibly important.

They apply to both commercial and domestic properties, with the minimum energy efficiency standard set at an E EPC rating. A rating of F or G will fall in the bracket known as Minimum Energy Efficiency Standard (MEES). This applies to all new tenancies granted after the date, however, from April 2020 the efficiency rating of all rented properties must be E or better.  

Who needs an EPC?

Energy Performance Certificates are needed whenever a property is sold, rented or built. An EPC is only required for a dwelling that is self-contained, meaning that it does not have an entrance via a separate unit or share any essential facilities (bathroom, kitchen etc). Landlords are not required to produce an EPC when an existing lease is renewed, only when the tenant changes.

Properties that are exempt for lettings include:

  • Temporary buildings with under two years use
  • Holiday lets under four months
  • Properties that are exempt for sales include:
  • Listed or officially protected buildings
  • Detached buildings with under 50 square metres of total floor space
  • Due to be demolished
  • Industrial sites & workshops

Currently, sellers and landlords can market their property immediately once an EPC has been commissioned but must ensure that the EPC is in place within a maximum of 28 days.

Who will be affected by the new Energy Performance Certificate regulations?

The Department of Energy & Climate Change report that nearly one in ten domestic properties fall below the E rating and nearly one in five non-domestic. These numbers suggest that a significant proportion of UK houses will be affected by these regulations. With building regulations ensuring that recently built properties sit well above the lower energy efficiency standards, the Minimum Energy Efficiency Standards will affect older buildings throughout the UK.

Landlords with properties within this boundary are legally obliged to carry out upgrades to the building to improve the rating. Should they choose not to do this, the penalty for renting out a domestic property in breach of the MEES regulations for less than three months will be £2,000. After this three month period, the penalty increases to £4,000. If a landlord breaches the Minimum Energy Efficiency Standard regulation, this will be displayed on the exemptions register for a minimum of 12 months.

How long will an EPC last?

EPCs are valid for 10 years and can be reused for new tenants as many times as required within that period. A landlord may choose to commission a new EPC if improvement works have been carried out, but there is no legal requirement to do so.

Why has the Minimum Energy Efficiency Standard been introduced?

A ratings of F or G implies that the building could potentially cause environmental problems. The government has identified building emissions as a major contributor to Greenhouse Gas emissions. These new regulations are necessary if we hope to meet the carbon reduction targets for 2020 and 2050 as set in the Climate Change Act (2008).

How do I get an EPC?

Only accredited domestic energy assessors and, certified home inspectors can produce EPCs for domestic properties. They analyse how homes are constructed, insulated, heated and ventilated, and the type of fuel being used.

Once your property has been given an EPC, it receives a unique number and is registered on a national database by the assessor. You can download extra copies by using the report reference number on the top right-hand side of the certificate.

Which properties are exempt from the MEES regulations?

There are three cases in which the above does not apply. These are valid for five years and cannot be transferred to a new landlord should the property be sold:

  • The ‘Golden Rule’: This applies to two instances: the first where an independent assessor has determined that all possible energy efficiency improvements have been made and the second applies to the conclusion that the possible improvements that can be made would not pay for themselves in seven years through energy savings.
  • Devaluation: The property is exempt from the MEES regulations should an independent surveyor establish that the required energy efficiency improvements are likely to reduce the value of the property by more than 5%.
  • Third Party Consent: If the tenant, a superior landlord or planning authorities refuse to give their consent for the energy efficiency improvements to be carried out, or conditions are given which the landlord cannot comply to, then the MEES regulations are waived.

How Marsh & Parsons can help provide an EPC

Marsh & Parsons use accredited DEA’s (Domestic Energy Assessors) who are registered with the appropriate accreditation scheme and they are required to have passed a basic Criminal Record Bureau (CRB) check.

If you are intending to sell or let your property through Marsh & Parsons and require an EPC, then we will happily arrange this for you – your local sales or rentals team will be able to provide you with full details. Likewise, if you are not selling or letting, and would like to order an EPC with Marsh & Parsons, please contact us.

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