Property Maintenance Norwich

IMPACT ON LANDLORDS

EPC Reg

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The current position is that a tenancy cannot be granted to new or existing tenants if the property has an EPC rating of F or G, unless the property is registered on the PRS Exemptions Register.

However, from 1 April 2023, it will be an offence to continue to let or rent out a property if it does not have a rating of at least E. The penalty is based on the ratable value of the property and will be between £10,000 – £150,000 per breach. Details of the breach may also be made publicly available.

It has been indicated that these requirements will tighten again in the near future, with a proposal that commercial properties must have an EPC rating of C or higher by 1 April 2027, and B or better by 2030.

Residential properties

The requirement for the EPC rating to be E or higher has already been in place since 1 April 2020. Under current government proposals, in 2025 this will be upgraded to a requirement for the rating to be C or higher for any new lettings, and in 2028 it will also apply to any continuing tenancies.

The law and the first court decisions around the topic make it clear that the obligation to comply with the legislation rests with the landlord and is not to be delegated to the tenant, although it may be that the costs are recoverable from the service charge in some cases.

Investors, developers, and landlords must consider factors such as the cost of upgrading works; the loss of income if a property can no longer be rented out because the works have not been done; and the level of the fine if the requirements are not met. Portfolios should therefore be reviewed and EPCs obtained if they are not already in place. Where works are required, they should be considered, and if third party consents or exemptions apply, then applications to obtain these or to be entered on the register of exemptions should be made.

Experts and contractors may well be booked up with the approaching deadline, and so this should be done sooner rather than later, as leaving it to the last minute could prove expensive.

This will clearly be extremely important for all those with an interest in property, as it could affect the availability of a property for letting, and the rent/purchase price valuations.

Owners of properties that do not have an EPC rating of A to E will need to carry out sufficient works to improve the rating before 1 April 2023, or else to register a valid exemption if available. Otherwise, it will be an offence to continue to let the property without having done so.

Property owners will therefore need to be able to show that:

• there is an appropriate EPC rating in place; or
• all the ‘relevant energy efficiency improvements’ that can be made have already been made, or that there are no such improvements to make; or
• that there is a valid exemption.

There are various exemptions which may be applied for both commercial and residential properties, as listed below:

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