2018 EPC Minimum Standards Regulations

Published on: 3rd March 2016

The Energy Act 2011 commits the government to bring into force by 1 April 2018 regulations prohibiting the letting of properties in England and Wales that do not meet the minimum energy performance standard (MEPS).  The proposed changes would make it unlawful for you to let residential and commercial properties with an EPC rating lower than ‘E’.

What does this mean to me?

Properties that fall below an EPC rating of E would become impossible to market unless upgraded to meet the minimum standards.  This may lead to valuations, rent reviews and dilapidation assessments becoming negatively affected with a significant reduction in the property value.

The regulations will apply with three possible options.

1. Only new leases need to comply with the minimum EPC rating of E by 1st April 2018;
2. All leases will be affected from the 1st April 2018; or
3. A combination of the two – meaning the regulations will apply to all new leases from the 1st April 2018 with a long stop date of 2023 for all existing leases.

Will it affect all landlords?

The government are proposing a handful of instances where landlords may be exempt from the regulations. 
- If the energy efficiency improvements which are proposed, would have a negative impact on property value.
- If third party consent is denied from tenant, leader, planning authority or a higher landlord.
- If all improvements that are possible to be undertaken at no upfront cost to the landlord still creates an EPC rating below the minimum requirements.

What can we do for you?

We recommend that you start taking action now rather than waiting for the government to publish the specific details and accordingly we can assist you in the following ways:
- Complete a full review of your property portfolio and assess the properties which currently have an EPC’s
- Identify those properties that do not meet the proposed minimum EPC rating
- Establish the cause of the poor rating
- Identify what recommendations can be made to improve the EPC rating
- Assess the lease to identify where the responsibility lies
- Provide an assessment of the impact on maintenance life cycle costing
- Assess those works that would be recoverable by way of enhanced capital allowances including those me through the Governments Green Deal initiative
- Procure and manage all necessary improvement
- Provide energy performance reports and ratings for statutory compliance and marketing purposes
- Provide advice on the appropriate marketing of your properties.

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Energy performance clock is ticking for landlords

Forthcoming regulations will forbid the letting of commercial buildings below a minimum energy performance rating after 2018. David Fairley partner in our building consultancy team and accredited non-domestic energy assessor, considers the potential impact for commercial landlords and possible ways forward in improving the energy performance of their buildings.

Read More....

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Forthcoming regulations will forbid the letting of commercial buildings below a minimum energy performance rating after 2018.

David Fairley partner in our building consultancy team and accredited non-domestic energy assessor, considers the potential impact for commercial landlords and possible ways forward in improving the energy performance of their buildings.

[fulltext] =>

Under the 2018 Energy Performance Certificate (EPC) Minimum Standards Regulations landlords will only be able to let properties if they have achieved a minimum EPC rating band of E. Figures suggest that 18% of commercial property in the UK currently has an EPC rating of F or G, and a further 20% has a rating of E.

Under Section 49 of the Energy Act 2011, landlords will be prohibited from letting (but not selling) any property that does not meet the minimum energy performance standard (MEPS) by 1 April 2018. The bill was introduced to try and speed up energy-efficiency upgrades in the non-domestic sector. It means landlords with properties which have an EPC rating of F or G, will only be able to let the property after they have carried out improvements to bring it up to the minimum EPC rating band of E.

It is estimated that buildings account for around 40% of the EU's total energy consumption and 43% of the UK's total carbon-dioxide emissions.

It is clear that the 2018 EPC minimum standards regulations will have significant implications for landlords and occupiers who wish to assign or sub-let space. Most notably, it will be impossible to market properties with F and G ratings unless they are upgraded to meet the minimum standards. Whilst further clarification is required on the transactional trigger for minimum energy standards, it is likely that they will apply to all lettings and re-lettings, including sub lettings and assignments.

However, there are further implications too. The impact on valuations of such properties is likely to be affected, with a significant diminution in their value. Rent reviews for properties of an F or G rating are also likely to be affected.

Although the regulations are to be brought into force from 1 April 2018, the Government is proposing several instances where a landlord may be exempt from compliance and therefore able to legally let a property with an EPC rating below the minimum requirements.

A landlord will be able to claim an exemption if third-party consent is denied from tenant, lender, planning authority or a higher landlord/ freeholder, and will have six months to comply with the regulations or register an exemption following lease renewals. The exemption is also only available if the proposed energy-efficiency improvements would have a negative impact on the value of the property. There is also dispensation if all the improvements that are possible to be undertaken at no upfront cost to the landlord, such as those that can be completed through a Government finance arrangement, still do not lift the EPC rating above the minimum requirements.

In accordance with the procedures currently in place for EPCs, the enforcement of the MEPS regulations will be via local Trading Standards Officers. The level of penalty has not yet been disclosed but is likely to reflect the rateable value of the property, with fines in the region of £5000 to £150 000, depending on the length of the non-compliance and the rateable value of the property. There will also be a penalty of £5000 for providing false or misleading information to the exemptions register.

By working with a property consultant to complete a review of their property portfolio, landlords can identify those properties with a rating below the minimum Energy Performance Standard and, crucially, establish the cause of the rating.

We can also support landlords to identify what improvements could be made to raise the energy standard of the property, assess the lease to identify where the responsibility lies and provide an assessment of the impact on maintenance life-cycle costing.

Even if a property does not meet the minimum standard, this regulation will not necessarily mean that expensive energy-efficiency upgrades are needed. In some cases the rating may be a direct consequence of inefficient tenant alterations which will be removed at the end of their term, whilst others may discover that refurbishing the external fabric of the building as part of normal cyclical maintenance could upgrade the rating.

Clearly there is still some detail to be confirmed, but with less than two years until the regulation comes into force, landlords must act sooner rather than later to ensure compliance and reduce energy bills for tenants — before it's too late.

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Environmental & Sustainability Consultancy

As qualified EPC assessors we will ensure that we prepare and produce your EPC in the shortest possible time to allow your building’s sale or letting may be arranged swiftly. Under the Energy Act and the Energy Efficiency Regulations it will soon be illegal to offer new lettings on premises with an EPC rating of F or lower. We can offer advice on not only the current energy rating, but strategy as to how any properties that do not meet that benchmark may be improved to provide a minimum EPC rating of E and therefore maintain the ability to continue letting the property. Having expert knowledge of the EPC calculations our EPC assessors can also advise on cost effective solutions in order to achieve this.   Contact Us

Read More....

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As qualified EPC assessors we will ensure that we prepare and produce your EPC in the shortest possible time to allow your building’s sale or letting may be arranged swiftly.

Under the Energy Act and the Energy Efficiency Regulations it will soon be illegal to offer new lettings on premises with an EPC rating of F or lower. We can offer advice on not only the current energy rating, but strategy as to how any properties that do not meet that benchmark may be improved to provide a minimum EPC rating of E and therefore maintain the ability to continue letting the property. Having expert knowledge of the EPC calculations our EPC assessors can also advise on cost effective solutions in order to achieve this.

 

Contact Us

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Building Surveying

Our building surveying team will give you a detailed understanding of the condition of the property you are planning to buy, or rent, or already own.

Read More....

stdClass Object ( [state] => 1 [modified] => 2018-05-11 14:41:29 [id] => 58 [asset_id] => 186 [title] => Building Surveying [alias] => building-surveying [introtext] =>

Our building surveying team will give you a detailed understanding of the condition of the property you are planning to buy, or rent, or already own.

[fulltext] =>

We provide several different types of building surveys, (each of which can be tailored to suit your requirements) including:

  • Pre-acquisition surveys – an analysis and quantification of potential risks to the building you are about to purchase or rent
  • Technical due diligence – a detailed technical analysis of the property you about to purchase or rent, currently own or rent, including full ananlysis of any related legal, statutory and construction documents;
  • Pre-divestment surveys – an analysis of the existing building you are about to dispose of, which may be transferred to any purchaser that acts to speed up your property sale

 

When looking for a new property, a building survey will ensure you know of any defects to the building before entering into a contract and the costs of remedying any disrepair.

Working with us also allows you to plan ahead, taking into account any extra costs that may be require allocating to satisfy any key defects, repairing liabilities, legal or regulatory obligations and give you long term knowledge on the costs of the property’s maintenance during your ownership.

To find out which survey best suits you and your property, please get in touch.

Contact Us

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RICS CCS TDS Arla Ombudsman bsi