Wales Landlord Guidance
Energy Efficiency Improvements
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1.6 Energy Efficiency Improvements
1.6.1 Tenant’s Energy Efficiency Improvements
A tenant is allowed to reasonably ask for a relevant energy efficiency improvement. A relevant improvement will only be reasonable if it–
- 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
A request must be in writing and may be given by post.
When a landlord receives a request, a landlord will only be able to refuse consent on limited grounds. But, because a request is only “relevant” if it is of no cost to the landlord this shouldn’t be too much of an issue. A landlord may fund improvements if they prefer.
A landlord needs to provide an “initial response” within one month of service of the tenant’s request and there are provisions available where consent is required from a superior landlord. It is possible for a landlord to also serve a “counter proposal” which specifies an alternative (or multiple alternatives).
There will be a few exemptions from having to carry out improvements such as if the works would reduce the market value of the property by more than 5% or consent from a third party has been refused.
An application to the First-tier Tribunal can be made to determine any disputes that may arise.
1.6.2 Minimum Level of Energy Efficiency
From 1 April 2018, all rented property let on assured shorthold tenancies, regulated tenancies under the Rent Act 1977 and four types of agricultural tenancy, which is to have a new tenancy must have an EPC rating of at least “E”.
This requirement also applies to all renewal tenancies to the same tenant for the same property on or after 1 April 2018. The duty is also triggered by “an extension”.
From 1 April 2020, all domestic property (including existing tenancies) of the types listed above, must have the minimum E rating. Non-domestic properties have until 1 April 2023 (including existing tenancies) to ensure they meet the E rating.
There are a number of exemptions for the minimum standard where-
- the property is unable to be brought up to the standard after £3,500 has been spent on recommended energy improvements
- the tenant refuses consent (exemption ends when tenant refusing access leaves the property)
- the landlord is unable to obtain consent from a third party
- works required to bring the property up to the “E” level would devalue the property by more than 5% of market value
Where a domestic property has been let which does not meet the minimum standard, the tenancy remains valid between the landlord and tenant but a fine will be payable by the landlord of up to £5,000. Fines can be much greater for non-domestic properties depending on their size.
The Department for Business, Energy & Industrial Strategy has published useful guidance about the minimum energy requirements available at: https://www.gov.uk/government/publications/the-private-rented-property-minimum-standard-landlord-guidance-documents
The Exemptions Register can be found here:
1.6.3 Green Deal
The Green Deal allows for energy efficiency improvements to be made and the cost of those improvements are offset by savings made by the energy improvements.
The Green Deal has a “golden rule” which says that any cost of improvement must not exceed the savings being made by the improvements. This effectively means the improvements are free of charge and once paid for, the savings would begin. There are other factors to be considered under the golden rule such as the expected life of any energy efficiency improvement made.
For more information and to find a Green Deal provider, please see here: https://www.gov.uk/green-deal-energy-saving-measures
1.6.4 Energy Improvement Grants
A number of grants may be available for making energy improvements to a residential home.
The Affordable Warmth Obligation is probably the most familiar and is universally available. It is available on rented property as well as owner occupied and may cover all or part of the cost of insulation or replacing a boiler. In order to be able to obtain the work, the occupier must be on one of the following benefits:
- Pension Credit
- Child Tax Credit
- Working Tax Credit
- Income Support
- income-based Jobseeker’s Allowance
- income-related Employment and Support Allowance
- Universal Credit
There are a number of extra conditions including certain limits on the amount of income received and other benefits are paid in certain circumstances.
More information and how to apply is available at https://www.gov.uk/energy-company-obligation.
From time to time, Government, private organisations or local authorities provide other grants or incentives. See here for more information: https://www.simpleenergyadvice.org.uk/energy-efficiency/reduce-bills.