Newly-released guidance from the Government outlines that landlords are not expected to pay for renovations to increase the energy efficiency of their properties out of their own pocket.

The Government has finally released guidance on the minimum rating for rental properties that will be coming into effect next April (our previous blog on the EPC changes can be read here). In summary, from 1st April 2018 landlords will no longer be able to let out a property with an EPC rating of F or G.

Exemptions to EPC Regulation

The Government has now clarified that exemptions will apply if:

• the landlord is unable to obtain funding to cover the cost of making improvements;
• all improvements which can reasonably be made have been made, and the property remains below an EPC rating of Band E.

Interestingly, this means that if a landlord is not able to obtain funding to undertake the recommended improvements via one of four options detailed below, they will be exempt from meeting the minimum energy efficiency level.

Funding Available for EPC Regulation

The four options available are:

• a Green Deal Plan
• Energy Company Obligation or similar scheme
• Funding provided by central government or local authority or third party at no cost to the landlord
• a combination of any of the above

The regulation is based on the principle of ‘no cost to the landlord’. Where funding is available to cover the cost of the recommended improvements, the landlord will be required to undertake them. If funding is not available to cover the whole cost, then the exemption applies.

Furthermore, changes to the way EPC grades are calculated could mean that having another assessment carried out on a property could raise the banding without landlords having to undertake any improvements.

Landlords need to be cautious about spending money on making energy performance improvements to avoid unnecessary costly outlay.

You can view the Government’s Domestic Private Rented Landlord Guidance in full here.

If you would like to book for a new EPC to be carried out at your property, so you can work out whether you will need to obtain funding for improvements, please give the team at McCartan a call on 01792 430100.

Sources: Gov.UK / Painsmith on Guidance / Painsmith on Funding / Painsmith on Funding (continued)