Energy performance certificates for dwellings in the social and private rented sectors

Key points

• from 1 October 2008, an EPC will be required whenever a building in the social or private rented sectors is let to a new tenant

• a building can be: the whole of a building; or part of a building where the part is designed or altered to be used separately. For residential purposes, ‘designed or altered to be used separately’ describes a unit that is self-contained, meaning that it does not share essential facilities such as a bathroom/shower room, wc or kitchen with any other unit, and that it has its own entrance, either from outside or through common parts, that is not through another dwelling

• landlords must provide an EPC free of charge to prospective tenants at the earliest opportunity and must provide a copy of the EPC to the person who takes up the tenancy

• the purpose of the EPC is to show prospective tenants the energy performance of the dwelling they are considering renting

• EPCs are valid for 10 years and can be reused as many times as required within that period. It is not necessary to commission a new EPC each time there is a change of tenant. However, once a more recent EPC has been produced for a dwelling, it will always supersede an existing one. Thus, where a number of EPCs are obtained for a property within the ten year period only the most recent one is valid

• an EPC is not required for any property that was occupied prior to 1 October 2008 and which continues to be occupied after that date by the same tenant. However, landlords may commission EPCs for these dwellings if they wish

• the EPC shows two things – the Energy Effi ciency Rating (relating to running costs) and the Environmental Impact Rating (relating to the carbon dioxide emissions) of a dwelling. Each rating is shown on an A–G rating scale similar to those used for fridges and other electrical appliances

• the rating is accompanied by a recommendation report that shows how to improve the dwelling’s energy effi ciency. These two elements together form the EPC and the complete document must be provided to the new tenant. There is no statutory requirement to carry out any of the recommended energy efficiency measures stated in the recommendation report

• EPCs must be produced by an accredited assessor, but landlords are free to seek accreditation for themselves and their employees and so become competent to certify their own properties

General requirements

The landlord must commission an EPC and ensure a copy of it, including the recommendation report, is available free of charge to prospective tenants at the earliest opportunity. As a minimum, this should be when prospective tenants are first given written information about a dwelling or are arranging to view it, and before any rental contract is entered into.

A copy of the EPC (rating and recommendation report) must be given free of charge to the person who ultimately becomes the tenant before any rental contract is entered into.

From 1 October 2008, an EPC will be required whenever a building in the social or private rented sectors is let to a new tenant. A building can be: the whole of a building; or part of a building where the part is designed or altered to be used separately.

An EPC is only required for a dwelling that is self-contained, meaning that it does not share essential facilities such as a bathroom/shower room, wc or kitchen with any other dwelling, and that it has its own entrance, either from outside or through common parts, that is not through another unit.

In instances of lettings where marketing activity is initiated pre-October 2008, an EPC is only required if the property continues to be offered for let on or after 1 October 2008.

Where the landlord has an agent, they may be given the task of ensuring that these requirements are met. However, the landlord will remain responsible for any breaches.

Lease renewal

The landlord is not required to produce an EPC when an existing lease is renewed, only when the tenant changes.

Communications

Landlords should bear in mind the most appropriate way of communicating with prospective tenants. Weblinks or electronic communications are acceptable, provided that prospective tenants will be able to access information in this way and consents to receive it in this form. The Landlord should maintainan auditable trail of communication to show: whether a tenant has agreed to receive an EPC electronically; and whether they have in fact received it.

Existing EPCs

If a landlord already has an EPC for a property, for example because it was recently purchased and the EPC was part of the Home Information Pack, this EPC can be used for the subsequent rental. EPCs are valid for 10 years from the date of its production for rental purposes but only for 12 months if it is to be used for a HIPs related sale.

Verbal tenancies

In the case of verbal tenancies, i.e. where there is no written agreement, it may not always be clear when the tenancy was made. The landlord should provide a copy of the EPC to the new tenant as soon as it becomes clear who will be taking up the tenancy.

Landlords providing emergency accommodation

Landlords providing accommodation where a tenant needs urgent relocation because of an emergency are exempt from the requirement to make an EPC available before renting out the dwelling if there is no valid certificate and insufficient time to commission one. However, an EPC must be provided as soon as is reasonably practicable after the renting out the dwelling.

Validity period of EPCs

EPCs are valid for ten years and can be reused for new tenants as many times as required within that period. If a new EPC is commissioned, this then becomes the only valid one. EPCs are not invalidated by renovation works or improvements. However, a landlord may wish to obtain a new certificate to demonstrate the energy efficiency improvements to potential tenants.

An EPC will relate to a single dwelling, so if a building is converted such that it will contain more, or fewer, separate dwellings than before, a new EPC will be required in relation to each new self-contained dwelling.

Production of EPCs

EPCs must be produced by an accredited Domestic Energy Assessor (DEA).

To be accredited, a DEA or HI must be registered with an accreditation scheme. It is the scheme’s responsibility to ensure the assessor is competent and that periodic quality checks are carried out on the assessor’s work.

The DEA or HI will carry out a survey of a property to gather data about the dwelling and the building fabric, the extent of any insulation, the installed heating and hot water services and the fixed lighting.

As they may be visiting occupied homes, both DEAs and HIs are required to pass a basic Criminal Records Bureau (CRB) check.

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Enforcement

The local weights and measures authority, which will be the Trading Standards department for the area, is responsible for enforcing the regulations that require EPCs to be produced for rented dwellings. An authorised Trading Standards officer (TSO) has powers to ask a landlord who appears to be or to have been under a duty in the regulations to produce for inspection an EPC and recommendation report if the TSO suspects that an offence has been committed. This might occur, for example, if a prospective tenant complains that they have not been given access to a copy of the EPC, or if the tenant does not receive the EPC when he takes up the tenancy.

If the landlord has failed to provide an EPC to a tenant, or fails to show an EPC to an enforcement officer when asked, Trading Standards can issue a notice with a penalty charge of £200 per dwelling. In addition to paying the penalty notice, the landlord will still have to provide an EPC to the person who has become the tenant.

Surveying tenanted dwellings

Landlords planning to produce EPCs for homes that are occupied may need to consider whether access to gather the data could be a problem. Some issues to consider:

• the rights and limitations in the lease in relation to access by the landlord, or a person acting on their behalf

• ways to encourage tenants to grant access: giving adequate notice and considering whether evening or weekend appointments may be more convenient

• good communications: engaging tenants in the process helps them understand why they should grant access

• considering any special access requirements for vulnerable tenants

The Accreditation Schemes’ codes of practice will prevent DEAs from entering dwellings where there are unsupervised children present, and may also extend this to vulnerable adults. It is important (if appointing external DEAs) for landlords to make clear where there may be vulnerable tenants present, as the need to have accompanied visits may add costs or time to the process.

Landlord and tenant responsibilities

A summary of responsibilities is provided below:

• copy of the certificate: the landlord must provide the whole EPC (including the recommendations report) free of charge to the new tenant

• understanding the running costs: though this is not an obligation, the landlord should advise the tenant that the estimated running costs (a) are based on standardised consumption (number of occupants and hours of heating per day) (b) take into account costs for heating, hot water and lighting only and do not include the cost of appliances and (c) are based on average fuel prices current when the EPC was produced. The running costs could have been estimated up to 10 years previously and will not reflect the higher rates typically paid by those using prepayment schemes

• implementing the report recommendations: there is no obligation on the landlord to carry out any of the measures. Tenants can act on the behavioural advice (eg turning down a thermostat). Typically it is likely to be the landlord who carries out physical improvements

• understanding what the recommendations mean. The potential rating is based on the adoption of all of the cost-effective measures.

These are separated into lower cost measures (up to £500) and higher cost measures (over £500). In some cases, adopting a measure may improve energy efficiency but may not be suffi cient for the dwelling’s energy rating to improve by a whole band

• although a measure may improve the dwelling’s energy efficiency, it may not be cost effective for the landlord to replace existing equipment that is relatively new, eg a boiler. Furthermore, even if a dwelling has the potential to be improved, the landlord is under no obligation to do so

• understanding the Further Measures section: this section includes measures that those who are very keen to invest in energy efficiency may want to consider, but which are considerable investments with long payback times (over seven years). Tenants need to understand what these mean and that it may not be realistic to expect a landlord to install these measures

In summary

Q. When do the obligations for rented dwellings come into force?

A. 1 October 2008

Q. Where does the 10 year validity period come from?

A. The requirement for an EPC is driven by the European Union legislation, which includes a provision that the validity period of EPCs should not exceed 10 years.

Q. Where can I find an energy assessor?

A. Details of accredited energy assessors can be found on www.epcregister.com.

Q. Can a landlord charge a tenant for the provision of an EPC?

A. It is not permitted for the landlord to charge for the provision of the original EPC. However it is permissible for a tenant who has already received the EPC to be charged for the provision of a copy document.

Q. Is it possible to amend and update an EPC without the need to commission a new survey? A new EPC might be wanted, for example, if a replacement boiler is fitted.

A. A DEA who issues the EPC would need to be satisfied that it accurately reflects the energy performance of the property. The DEA may be satisfied through means other than a full survey.

Q. Is it always the building owner who is responsible for producing the EPC? What if the building owner has no direct relationship with the tenants?

A. Where a tenant sub-lets a dwelling, the responsibility to make an EPC available lies with the sub-leaseholder.

Q. Who has access to the EPCs on the Domestic Register?

A. In broad terms, only an individual who has the unique reference number for the EPC in question, has the right to access an EPC on the Domestic Register. However, the accreditation scheme responsible for the particular EPC, the enforcement authorities and, on an anonymised basis for research purposes, the Department for Communities and Local Government will also have access to the EPCs.

Q. Is it possible to advertise a property before the EPC has been produced?

A. There may be occasions when it is possible to offer a dwelling for rent before the EPC is available. However this should not be the norm. The landlord will be expected to have made contact with a DEA and commissioned the EPC with a view to receiving it within two weeks of the date it was commissioned.

Q. If an EPC is being produced when the dwelling is empty, what impact will occupying tenants have on the accuracy of the energy and environmental ratings?

A. The occupying tenant will have no impact on the EPC ratings, as these are produced using standardised occupancy data (ie number of occupants and hours of heating per day).

Q. What if the tenant wants to buy the dwelling they already occupy? Can I use the same EPC as I used when they took the tenancy?

A. If the tenant wants to purchase the dwelling they rent, the same EPC can be used. This is because it is a non-marketed sale not affected by the HIPs Regulations. An EPC is required but this can be up to 10 years old. However, if the dwelling is also being placed on the open market, the EPC must be no more than 12 months old because it is affected by the HIPs Regulations.

Q. Is an EPC needed if tenants are moving via a mutual exchange?

A. If advertised for exchange via a choice based lettings system, then an EPC will be required. If the exchange has been agreed privately than an EPC is not required.

Q. Is an EPC needed for shared ownership dwellings?

A. The first equity purchase of the dwelling creates a trigger for an EPC to be produced. The purchase of subsequent equity does not create a need for a further EPC.

Q. What happens in the case of Stock Transfer? Can we have one EPC for a whole block in that case?

A. For a stock transfer an EPC is required for each dwelling. However, it may be possible to employ techniques which will reduce the number of dwellings that need to be assessed. Separate guidance will be available on these.

Q. What happens if I need to get an EPC to advertise the property, but I am going to improve before the new tenant moves in?

A. Either explain to the tenant that improvement works were carried out since commissioning the EPC and so the dwelling’s energy effi ciency rating may now have changed, or commission another EPC after completion of the improvements.

Q. Will I have to issue an EPC if I have a lodger in my house?

A. A letting of a room within your larger household does not constitute a rental of a building or part of a building therefore an EPC is not required.

Q. Will I need to show an EPC to prospective residents of, for example, a care home or a boarding school?

A. These examples do not constitute a rental of a building or a part of a building. Therefore an EPC is not required.

Q. Is an EPC required under a long term Regulated tenancy where a tenant dies and a partner, member of their family or other individual is able to succeed to the tenancy under the Rent Act 1977?

A. Under such circumstances an EPC is not required.

Q. Will an EPC be needed for holiday accommodation?

A. If the agreement between the parties expressly allows for a short period of holiday occupation only and no intention to create a tenancy can be inferred, then an EPC is not required.

For a full copy of the DCLG Landlords Guide see

http://www.communities.gov.uk/documents/planningandbuilding/pdf/866773.pdf

and

http://www.communities.gov.uk/documents/planningandbuilding/pdf/1015924.pdf