Tag: 2020 Landlord Regulations

APRIL: Domestic private rented property: minimum energy efficiency standard – landlord guidance

APRIL: Domestic private rented property: minimum energy efficiency standard – landlord guidance

Guidance for landlords of domestic private rented property on how to comply with the 2018 ‘Minimum Level of Energy Efficiency’ standard (EPC band E).

This guidance provides information on the main aspects of the regulations. If your particular situation is not covered, we have more detailed guidance including case studies.

Find out if your property is covered by the Regulations

The Domestic Minimum Energy Efficiency Standard (MEES) Regulations set a minimum energy efficiency level for domestic private rented properties.

The Regulations apply to all domestic private rented properties that are:

  • let on specific types of tenancy agreement
  • legally required to have an Energy Performance Certificate (EPC)

Answer these questions to find out whether your property is covered by the Regulations

1. Is your property let on one of the following types of domestic tenancies:

  • an assured tenancy?
  • a regulated tenancy?
  • a domestic agricultural tenancy?

2. Is your property legally required to have an EPC?

If the property you let has been marketed for sale or let, or modified, in the past 10 years then it will probably be legally required to have an EPC.

If you answered Yes to both these questions, and your property has an EPC rating of F or G, you must take appropriate steps to comply with the requirements of the MEES Regulations. We explain how to do this below.

If you answered No to one or both of these questions, your property is not covered by the Regulations, and you don’t need to take action to improve the property rating. You may let it with an EPC rating of F or G.

Find out how to get a rating on your property

Find out more about EPC requirements for homes

When you need to take action to improve your property to EPC E

Since 1 April 2020, landlords can no longer let or continue to let properties covered by the MEES Regulations if they have an EPC rating below E, unless they have a valid exemption in place.

If you are currently planning to let a property with an EPC rating of F or G, you need to improve the property’s rating to E, or register an exemption, before you enter into a new tenancy.

If you are currently letting a property with an EPC rating of F or G, and you haven’t already taken action, you must improve the property’s rating to E immediately, or register an exemption.

If your property is currently empty, and you are not planning to let it, you don’t need to take any action to improve its rating until you decide to let it again.

Funding improvements to your property

The cost cap: you will never be required to spend more than £3,500 (including VAT) on energy efficiency improvements.

If you cannot improve your property to EPC E for £3,500 or less, you should make all the improvements which can be made up to that amount, then register an ‘all improvements made’ exemption.

There are 3 ways to fund the improvements to your property:

Option 1: Third party funding

If you are able to secure third-party funding to cover the full cost of improving your property to EPC E, you can use this and you don’t need to invest your own funding:

  • the cost cap does not apply
  • you should make use of all the funding you secure to get your property to band E, or if possible higher. Funding can include:
  • Energy Company Obligation (ECO)
  • local authority grants
  • Green Deal finance

Find out more about funding opportunities for landlords

Option 2: Combination of third-party funding and self-funding

If you can secure third-party funding but it is:

  • less than £3,500, and
  • not enough to improve your property to EPC E

you may need to top up with your own funds to the value of the cost cap.

Please note

  • you can count any energy efficiency investment made to your property since 1 October 2017 within the cost cap
  • if your property can be improved to E for less than the cost cap, that is all you need to spend

Option 3: Self funding

If you are unable to secure any funding, you need to use your own funds to improve your property. You will never need to spend more than the cost cap.

You do not need to spend up to £3,500 if your property can be improved to EPC E for less. If you can improve your property to E for less than the cap, you will have met your obligation.

If it would cost more than £3,500 to improve your property to E, you should install all recommended measures that can be installed within that amount, then register an exemption.

If you have made any energy efficiency improvements to your property since 1 October 2017, you can include the cost of those improvements within the £3,500 cost cap.

Selecting energy efficiency measures

Your EPC report will include a list of recommendations detailing measures which should improve the energy efficiency of your property. It will include both a short list of top actions you can take, and a more detailed list further down setting out all recommended measures. The recommendations will help you choose which measure or combination of measures to install.

Sample table of recommendations from the EPC report

These measures will improve the energy performance of your dwelling. The performance ratings after improvements listed below are cumulative, that is, they assume the improvements have been installed in the order that they appear in the table.

Recommended measuresIndicative costTypical savings per yearRating after improvement
Room-in-roof insulation£1,500-£2,700£837E39
Internal or external wall insulation£4,000-£14,000£195E45
Solid floor insulation£4,000-£6,000£122E49
Increase hot water cylinder insulation£15-£30£142E54
Draught proofing£80-£120£18D55
Low energy lighting£20£21D56
High heat retention storage heaters / dual immersion cylinder£1,200-£1,800£319D67
Solar water heating£4,000-£6,000£57C69
Replace single glazed windows with low-E double glazed windows£3,300-£6,500£123C73
Solar photovoltaic panels£5,000-£8,000£287B83

The MEES Regulations refer to the concept of ‘relevant energy efficiency improvements’. This is a measure, or package of measures, recommended in your EPC report, which can be purchased and installed for £3,500 or less (including VAT) – the cost cap.

Other types of energy efficiency reports may contain the recommendations list from the EPC report, for example, a Green Deal Advice Report (GDAR), or reports produced by qualified surveyors.

If you have installed all ‘relevant energy efficiency improvements’ for your property, but your property’s EPC rating is still below E, you can register an exemption on the grounds that ‘all relevant improvements have been made and the property remains below an E’.

You are free to install any energy efficiency measure(s), but:

  • if your chosen improvements do not appear in the list of ‘recommended energy efficiency improvements’
  • and they fail to improve your property to EPC E

you will not be able to let the property or register an ‘all relevant improvements made’ exemption. You will then need to make further attempts to improve the rating to a minimum of E, in order to let the property.

Registering an exemption

There are various exemptions that apply to the prohibition on letting a property with an energy efficiency rating below E.

If your property meets the criteria for any of the exemptions, you will be able to let it once you have registered the exemption on the PRS Exemptions Register.

Information required for all exemptions

  • address of the property
  • type of exemption you are registering
  • copy of a valid EPC for the property

‘All relevant improvements made’ exemption

Register this exemption if the property is still below EPC E after improvements have been made up to the cost cap (£3,500 incl VAT), or there are none that can be made.

This exemption lasts 5 years. After that it will expire and you must try again to improve the property’s EPC rating to E. If it is still not possible, you may register a further exemption.

To register this exemption, you need to provide this additional information:

  • if you didn’t rely on your EPC report to select measures appropriate for your property, and instead opted for a report prepared by a surveyor for example, you must provide a copy of that report
  • details, including date of installation, of all recommended improvements you made at the property (unless none were recommended)

‘High cost’ exemption

Register this exemption if no improvement can be made because the cost of installing even the cheapest recommended measure would exceed £3,500 (including VAT).

This exemption lasts 5 years. After that it will expire and you must try again to improve the property’s EPC rating to E. If it is still not possible, you may register a further exemption.

To register this exemption, you need to provide this additional information:

  • 3 quotes from qualified installers for purchasing and installing the cheapest recommended measure, demonstrating that the cost would exceed £3,500 (including VAT)
  • written confirmation that you are satisfied that the measure exceeds £3,500 (including VAT)

Wall insulation exemption

Register this exemption if the only relevant improvements for your property are:

  • cavity wall insulation
  • external wall insulation
  • or internal wall insulation (for external walls)

AND

you have obtained written expert advice showing that these measures would negatively impact the fabric or structure of the property (or the building of which it is part).

This exemption lasts 5 years. After that it will expire and you must try again to improve the property’s EPC rating to E. If it is still not possible, you may register a further exemption.

To register this exemption, you need to provide this additional information:

  • a copy of the written opinion of a relevant expert stating that the property cannot be improved to an EPC E because a recommended wall insulation measure would have a negative impact on the property (or the building of which it is part)

Register this exemption if the relevant improvements for your property need consent from another party, such as a tenant, superior landlord, morgagee, freeholder or planning department, and despite your best efforts that consent cannot be obtained, or is given subject to conditions you could not reasonably comply with.

This exemption lasts:

  • 5 years
  • or, where lack of tenant consent was the issue, until the current tenancy ends or is assigned to a new tenant

In either case, once the exemption comes to an end, you need to try again to improve the EPC rating of the property, or register a further exemption.

To register this exemption, you need to provide this additional information:

  • copies of any correspondence and/or relevant documentation (such as a letter from your tenant, or a planning department decision notification) demonstrating that consent for the recommended measure was required and sought, and that this consent was refused, or was granted subject to a condition that you were not reasonably able to comply with

Property devaluation exemption

Register this exemption if you have evidence showing that making energy efficiency improvements to your property would devalue it by more than 5%. In order to register this exemption you will need a report from an independent surveyor. This surveyor needs:

  • to be on the Royal Institute of Chartered Surveyors (RICS) register of valuers
  • to advise that the installation of the relevant improvement measures would reduce the market value of the property, or the building it forms part of, by more than 5%

This exemption lasts 5 years. After that it will expire and you must try again to improve the property’s EPC rating to E. If it is still not possible, you may register a further exemption.

To register this exemption, you need to provide this additional information:

  • a copy of the report prepared by an independent RICS surveyor that provides evidence that the installation of the recommended measures would devalue to property by more than 5%

Temporary exemption due to recently becoming a landlord

If you have recently become a landlord under certain circumstances (see section 4.1.6 in Chapter 4 of the full Guidance document for details of those circumstances) you will not be expected to take immediate action to improve your property to EPC E. You may claim a 6 months exemption from the date you became a landlord.

This exemption lasts 6 months from the date you became the landlord. After that it will expire and you must have either:

  • improved the property to EPC E
  • or registered another valid exemption, if one applies

To register this exemption, you need to provide this additional information:

  • the date on which you became the landlord for the property
  • the circumstances under which you became the landlord

How to register an exemption

  • create an account
  • enter the address of your property
  • state the type of exemption you want to register
  • upload all the required evidence, including a copy of a valid EPC for the property (the Register can accept pdf, png, jpg, jpeg, doc or docx files, with a maximum size of 4 MB per file)

Exemption data cannot be amended once the data has been submitted. Make sure you have checked everything carefully before submitting.

All exemptions apply from the point you register them.

If you improve an exempt property to E after having registered an exemption (or stop renting the property out) you can cancel the exemption by going to your account ‘dashboard’ page and selecting ‘View or manage my exemptions’.

Register an exemption

Assisted digital to register an exemption

If Assisted Digital support is required to register an exemption please get in touch by email PRSRegisterSupport@beis.gov.uk or call the digital helpline on 0333 234 3422.

The Assisted Digital service provides digital support in lodging an exemption on the register, but it is the responsibility of the landlord to ensure that their property meets the eligibility criteria for an exemption. The service is not able to provide advice on whether individual properties meet the criteria for an exemption.

Members of the public can:

Enforcement and penalties

The MEES Regulations are enforced by local authorities, who have a range of powers to check and ensure compliance.

The Regulations mean that, since 1 April 2018, private landlords may not let domestic properties on new tenancies to new or existing tenants if the Energy Efficiency Certificate (EPC) rating is F or G (unless an exemption applies).

From 1 April 2020 the prohibition on letting F and G properties will extend to all relevant properties, even where there has been no change in tenancy.

If a local authority believes a landlord has failed to fulfil their obligations under the MEES Regulations, they can serve the landlord with a compliance notice. If a breach is confirmed, the landlord may receive a financial penalty.

Non-compliance with the Regulations

Your local authority may check for different forms of non-compliance, including one or more of the following:

  • from 1 April 2018, you let your property in breach of the Regulations
  • from 1 April 2020, you continue to let your property in breach of the Regulations
  • you have registered any false or misleading information on the PRS Exemptions Register

Compliance notices

If a local authority believes a landlord may be in breach, they may serve a compliance notice requesting information to help them decide whether a breach has occurred. They may serve a compliance notice up to 12 months after a suspected breach occurred.

A compliance notice may request information on:

  • the EPC that was valid for the time when the property was let
  • the tenancy agreement used for letting the property
  • information on energy efficiency improvements made
  • any Energy Advice Report in relation to the property
  • any other relevant document

Penalties

If a local authority confirms that a property is (or has been) let in breach of the Regulations, they may serve a financial penalty up to 18 months after the breach and/or publish details of the breach for at least 12 months. Local authorities can decide on the level of the penalty, up to maximum limits set by the Regulations.

The maximum penalties amounts apply per property and per breach of the Regulations. They are:

  • up to £2,000 and/or publication penalty for renting out a non-compliant property for less than 3 months
  • up to £4,000 and/or publication penalty for renting out a non-compliant property for 3 months or more
  • up to £1,000 and/or publication for providing false or misleading information on the PRS Exemptions Register
  • up to £2,000 and/or publication for failure to comply with a compliance notice

The maximum amount you can be fined per property is £5,000 in total.

Right of review and right of appeal

If you do not agree with a penalty notice, you may ask your local authority to review its decision. They can withdraw the penalty notice if:

  • new evidence shows a breach has not occurred
  • a breach has occurred, but evidence shows the landlord took all reasonable steps to avoid the breach
  • they decide that because of the circumstances of the case, it was not appropriate to issue a penalty

If a local authority decides to uphold a penalty notice, a landlord may appeal to the First-tier Tribunal if they think that:

  • the penalty notice was based on an error of fact or an error of law
  • the penalty notice does not comply with a requirement imposed by the Regulations
  • it was inappropriate to serve a penalty notice on you in the particular circumstances

Full compliance and enforcement process

The Local Authority (LA) checks if a property is in breach of Regulations where:

a. from 1 April 2018 it as been privately let to new or existing tenant; or
b. from 1 April 2020 it is privately let; or
c. the landlord registered an exemption and provided false or misleading information

If the property appears to be in breach of the Regulations, the LA may serve compliance notice on the landlord requesting further information.

If the property is in compliance, no further action will be taken.

If satisfied that the landlord is in breach of the Regulations, the Local Authority may serve a penalty notice on the landlord and publish details of the breach:

a. either the landlord accepts the penalty notice and pays the penalty
b. or if the landlord disagrees with the notice, they can request a review of the penalty notice decision.

The LA reviews the decision:

a. either they find in the landlord’s favour and the penalty is quashed
b. or they uphold the penalty notice

If the penalty notice is upheld, the landlord can appeal the decision to the First-tier Tribunal which will review the decision:

a. either the Tribunal finds in the landlord’s favour and the penalty is quashed
b. or the Tribunal rejects the landlord’s appeal, and the penalty is affirmed

The landlord then:

a. either pays the penalty
b. or does not pay the penalty, in which case the enforcement authority may take debt recovery action

More detail and examples

To find the full detail and case studies, read:

Legal disclaimer

Please note that BEIS cannot provide legal advice or a definitive interpretation of the law, as this is a matter for the courts. If you have questions that aren’t covered here, you will need to seek independent legal advice.

Setting long-term energy performance standards

Government has committed to look at a long term trajectory to improve the energy performance standards of privately rented homes in England and Wales, with the aim for as many of them as possible to be upgraded to EPC Band C by 2030, where practical, cost-effective and affordable.

MARCH: Extension of Homes (Fitness for Human Habitation) Act

MARCH: Extension of Homes (Fitness for Human Habitation) Act

As a landlord, you want to do your best by your tenants, and one fundamental way of doing that is to make sure the houses or flats you rent out are comfortable and safe for your tenants to live in.

It’s not just a mark of a good landlord, it’s a legal requirement too. The Homes (Fitness for Human Habitation) Act gives tenants the power to take legal action against those landlords who don’t take their responsibilities seriously.

So, to find out more about the ins and outs of the Act and what you should be doing to make sure your rental property complies, here’s everything you need to know about the Homes (Fitness for Human Habitation) Act.

What is the Homes (Fitness for Human Habitation) Act?

Introduced on 20 March 2019, the Homes (Fitness for Human Habitation) Act requires all landlords in England (including letting agencies) to maintain their properties so they meet the minimum standard for human habitation at the beginning and for the duration of the tenancy. The Act aims to protect tenants by giving them the power to take legal action against landlords they believe are acting irresponsibly.

The Fitness for Human Habitation Act is an extension of the Landlord and Tenant Act 1985, which sets out guidelines for private and social landlords so their properties are fit for human habitation.

Landlords don’t need to meet new obligations or follow different rules under this Act. The legislation simply makes it easier for tenants to hold landlords accountable and take them to court if they believe their properties aren’t in a habitable condition. 

If you’re a landlord in Scotland or Wales, you can visit the government’s website or Citizens Advice for information about the equivalent legislation in your area.

Does the Fitness for Human Habitation Act apply to all tenancies?

The Act applies to tenancy agreements in England granted after 20 March 2019. This includes:

  • Tenancies shorter than seven years
  • Seven-year tenancies that can be prematurely terminated by the landlord
  • Secure, introductory or assured fixed-term tenancies of more than years
  • Tenancies renewed for a fixed term

The Act will apply to all periodic tenancies (including those that started before 20 March 2019) from 20 March 2020.  

The Act does not apply to:

  • Licence agreements – such as lodgers, people living in temporary accommodation and some property guardians
  • Shared ownership leases
  • Most business, government or local authority tenancies

For more information about the type of tenancies covered by the Fitness for Human Habitation Act, visit the government’s website here.

Does my property meet the Fitness for Human Habitation Act criteria?

A property would be deemed unfit by the courts if one or more of the following issues were so bad that it would be unreasonable to expect a person to live there.

  • Unstable building
  • Serious dampness
  • Unsafe layout
  • Not enough natural light
  • Bad ventilation
  • No hot or cold water
  • Drainage or toilets issues
  • Poor cooking or washing up facilities
  • Or, any of the hazards set out in the Housing Health and Safety (England) Regulations

The courts decide whether a property is fit for human habitation. They might get an expert’s advice, like the Housing Health and Safety Rating System (HHSRS), but they don’t have to. For example, if a property doesn’t have any toilet facilities, an expert opinion isn’t necessary because the property is very obviously unfit.

Are issues with the property always the landlord’s responsibility?

Landlords aren’t always responsible for property defects. There are some occasions where the landlord isn’t required by law to fix a problem with the property. And, tenants have a responsibility to maintain and look after the property.

The landlord won’t be required to fix problems that have been caused by:  

  • The tenant behaving irresponsible or illegally
  • An ‘act of God’ like a fire, storm or flood
  • The tenants’ own possessions that aren’t included in the inventory.

The landlord can’t be held accountable when they can’t fix a problem if:

  • They can’t get planning permission or permission from freeholders. (There must be evidence that they’ve made reasonable efforts to get this.)
  • The tenant isn’t an individual. For example, local authorities, or housing associations.

How long do landlords have to fix a problem?

Landlords are responsible for an issue in their property from the moment the tenant tells them about it. Landlords have a reasonable amount of time to deal with the issue, which varies depending on how serious it is. If there are any hazards in a communal area of a block of flats or in a House in Multiple Occupation (HMO), the landlord could be liable.

If a tenant makes their landlord aware of an issue, and they’re not actively attempting to fix it, the tenant could be able to take the landlord to court. So, landlords should always attempt to fix an issue with the property as soon as possible.

What happens if my property is deemed unfit by the courts?

During the court hearing, the judge will look at the evidence provided by the landlord and the tenant. If a landlord is found to be failing to comply with the Act and the courts decide the property isn’t fit for human habitation because it’s dangerous or unhealthy, they can make the landlord:

  • Pay compensation to the tenant

The amount of compensation is at the judge’s discretion and there aren’t set penalty limits. The judge will consider the harm caused to the tenant and the condition of the property. Landlords may also be ordered to pay tenant’s legal costs.

  • Fix the issues in the property

The courts will consider the work to be compulsory and the type and number of improvements will depend on the property’s condition.  

What happens if I win the court case?

If a landlord wins the case, the tenant might have to pay some costs. The amount they’ll need to pay varies case by case and will be decided by the courts.

You might want to consider taking independent legal advice to discuss the different outcomes of going to court.