Energy Performance Certificate
What is an EPC and what does it mean?
EPC stands for Energy Performance Certificate. The EPC looks broadly similar to the energy labels provided on many household appliances. Its purpose is to indicate how energy efficient a building is. An EPC will provide an energy efficiency rating from A to G, where A is very efficient and G is the least efficient. The better the rating, the more energy efficient the building is, and the lower the fuel bills are likely to be.
When is an EPC required?
Before a building is put on the market the seller or landlord must commission an EPC for the building if no valid EPC exists already for it. A person acting on behalf of the seller or landlord (for example, the estate or letting agent) must be satisfied that an EPC has been commissioned for the building before it is put on the market.
The seller or landlord or a person acting on their behalf must use all reasonable efforts to ensure the EPC is obtained within seven days. A further 21 days is allowed if after using all reasonable efforts the EPC cannot be obtained within seven days.
How long is an EPC valid for?
An EPC is valid for 10 years or until a newer EPC is produced for the same building no matter how many times the property is sold or rented out during that period. Once an EPC reaches the ten year point and expires, there is no automatic requirement for a new one to be commissioned.
Is a new EPC required each time there is a change of tenancy?
No, provided the earlier certificate is no more than ten years old. An owner, landlord or tenant will be free to commission a further EPC within that ten year period if they choose.
When does the minimum level of energy efficiency provisions apply?
The domestic minimum standard was introduced in a phased manner, with triggers for new tenancies entered into from 1 April 2018 onwards, and a backstop date for all tenancies from 1 April 2020. This means that, from 1 April 2018 landlords must not let any sub-standard domestic property to new tenants, or renew or extend an existing tenancy agreement with existing tenants.
Transactions not considered a sale or rent
EPCs are required in all instances of sales or rent, however there are some situations where it is not required. These will include:
- lease renewals or extensions
- compulsory purchase orders
- sales of shares in a company, where buildings remain in company ownership
Are there exemptions to this requirement to have EPC?
- the landlord has made all the relevant energy efficiency improvements that can be made to the property (or that there are none that can be made) and the property’s energy performance indicator is still below an EPC rating of E, and this exception has been registered on the national PRS Exemptions Register; or
- no improvements have been made but a valid exemption applies which has been registered on the Exemptions Register
- all relevant energy efficiency improvements have been made (or that there are none that can be made), the EPC remains below E, and the exception has been registered on the Exemptions Register
- sale or rent for buildings due to be demolished.
- temporary buildings with a planned time of use of two years or less
- residential buildings which are intended to be used less than four months of the year or where the owner or landlord could reasonably expect the energy consumption of the building to be less than 25% of all year round use
- stand-alone buildings with a total useful floor area of less than 50m² (i.e. buildings entirely detached from any other building)
Are there any further exemptions from having an EPC?
Yes. Additional exemptions are:
The accommodations is low cost rental and is made available for rent which is below market rate and the accommodation in question is made available in accordance with rules designed to ensure that it is made available to people whose needs are not adequately served by the commercial housing market.
Low cost home ownership in accordance with shared ownership arrangements, equity percentage arrangements or shared ownership trusts as defined by section 70 of the Housing and Regeneration Act 2008 as amended.
A social landlord as defined under chapter 1 of part 1 of the Housing Act 1996 as amended.
EPCs are not required on:
How do I register an exemption on the PRS Exemption Register? What evidence is required?
All exemptions claimed by landlords to improving domestic properties with an EPC rating at F or G must be registered on the PRS Exemptions Register. This is an online process and does not cost anything to complete but you will need to have the correct supporting evidence available when you make your application. To access the PRS Exemption Register visit the PRS Register Website.
What if a landlord has no exemption and is in breach of the obligations?
Gedling Borough Council (GBC) will issue a compliance notice where it is believed a landlord may be in breach of the regulations
Compliance Notices can be served in the following circumstances
- Where GBC suspects that a landlord with a property in scope of the regulations is not compliant, or has not sufficiently proved an exemption, the local authority can serve a compliance notice on the landlord requesting further information.
- on sale or rent the seller or landlord failed to make a valid EPC available free of charge to the prospective buyer or tenant at the earliest opportunity or to the person who ultimately becomes the buyer or tenant
- on marketing the seller or landlord did not commission an EPC before the building was put on the market or the person acting on their behalf (i.e. estate or letting agent).
- the seller or landlord or a person acting on their behalf did not secure an EPC using all reasonable efforts within seven days of the building being put on the market. An EPC must be obtained 21 days after the initial seven day period
- the seller or landlord or a person acting on their behalf did not include the energy performance indicator in any advertisement of the sale or rental in commercial media
Penalty Notices can be served in the following circumstances
- Where GBC are satisfied that a landlord is (or has been in the last 18 months) in breach of the PRS Minimum Energy Efficiency Standards (MEES).
- Failure to provide a copy of the EPC when requested by an officer of GBC within seven days.
- Providing false or misleading information to the PRS Exemptions Register
- Failure to comply with a compliance notice from GBC
Frequently Asked Questions
Q: Who will be enforcing these Regulations?
A: The minimum standard Regulations will be enforced by Local Authorities. Each authority will develop their own approach to the enforcement of the Regulations, using the powers granted to them by the Regulations.
Q: Is there an appeals process regarding penalties and how long will the process take?
A: Yes. Appeals concerning penalties are initially to be made to the relevant Local Authority. If the Local Authority upholds a penalty notice on appeal, the landlord has a right to appeal to the First Tier Tribunal (General Regulatory Chamber).
Q: Do Local Authorities have discretion regarding the levying of penalties, whether to issue a penalty notice in the first place or the level of the fine imposed? If so will there be stated differences in the approach to enforcing these Regulations?
A: The Regulations set out the maximum level of fines/penalties that can be levied. However Local Authorities do have discretion to determine the level of fines in each case.
Q: What is the amount I could be fined for non-compliance with these Regulations?
A: Each individual infringement is penalised in the following manner:
- Renting out a non-compliant property and the landlord is less than three months in breach): up to £2,000 and/or publication penalty;
- Three months or more in breach: up to £4,000 and/or publication penalty;
- Providing false or misleading information the PRS Exemptions Register: up to £1,000 and/or Publication Penalty;
- Failure to comply with a compliance notice: up to £2,000 and/or Publication penalty.
There is a maximum level of penalty which applies to each property. This is set at £5,000. This means that if, for instance, a landlord is fined £2,000 for being in breach of the Regulations for less than three months, and they continue to let the property below the minimum standard after three months, the most they can be fined for a three months or more breach, will be £3,000. £5,000 in total.