Section 43 Energy Act 2011 requires the Secretary of State to make regulations which will place specified obligations in relation to domestic private rented property in respect of energy efficiency.

The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 are the proposed DRAFT regulations for that purpose. The regulations will essentially introduce two obligations:

  • tenant’s energy efficiency improvements and
  • minimum level of energy efficiancy

Tenant’s energy efficiency improvements

Part 2 of the regulations which are proposed to come into force from 1 April 2016 will allow a tenant to make a “relevant energy efficiency improvement”. Such an improvement will only be a reasonable request if the improvement –

  • can be wholly financed, at no cost to the landlord, by means of funding provided by central government, a local authority or any other person,
  • can be wholly funded by the tenant, or
  • can be financed by a combination of those two arrangements

Upon receiving such a request, a landlord will not be allowed to unreasonably refuse any request. However, as shown above, because a request is only “relevant” if it is of no cost to the landlord then this is unlikely to be a problem. There will be no problem in a landlord funding improvements if they wish.

There will be a number of exemptions from having to carry out even reasonable requests such as if consent from a third party has been refused or the works would reduce the market value of the property by more than 5%.

An application to the First-tier Tribunal can be made to determine any disputes that may arise.

Minimum level of energy efficiency

It is proposed for all new tenancies (including a renewal to the same tenants) granted on or after 1 April 2018, the property must have an energy performance indicator of at least band E.

In respect of domestic property, all properties (including existing tenancies) must have the minimum indicator of E by 1 April 2020.

For non-domestic, all property must be up to the minimum E standard by 1 April 2023 according to the draft regulations.

Exemptions

There are a number of proposed exemptions for the minimum standard:

  • the property is unable to be brought up to the standard
  • tenant refuses consent
  • not able to obtain third party consent
  • works required to bring the property up to minimum would devalue the property by more than 5% of market value

Penalties

Where a domestic property has been let which does not meet the minimum standard, the tenancy will remain valid between the parties but a fine will be payable by the landlord of up to £5,000. Fines can be much greater for non-domestic property depending on their size.

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