RLA Guide To Energy Performance Certificates

When is an EPC needed?

As from 1st October 2008 where a dwelling is being let an Energy Performance Certificate (EPC) will be required. Significant changes to these requirements take effect on 6th April 2012.
An EPC is required as follows:-

• Individual house/dwelling (i.e. a self contained property with its own kitchen/bathroom facilities) – one EPC for the dwelling.
• Self contained flats (i.e. each behind its own front door with its own kitchen/bathroom facilities) – one EPC per flat.
• Bedsits or room lets where there is a shared kitchen, toilet and/or bathroom (e.g. a property where each room has its own tenancy agreement) – No EPC is required.
• Shared flats/houses (e.g. a letting of a whole flat or house to students/young professionals etc on a single tenancy agreement) - one EPC for the whole house.
• Mixed self contained and non self contained accommodation – one EPC for each self contained flat/unit but no EPC for the remainder of the property.
• A room in a hall of residence or hostel - no EPC is required.

There are fixed penalties for failing to provide an EPC/make one available when required.  The fixed penalty for dwellings is £200 per dwelling.  There is a six month time limit for any enforcement action to be taken. 

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Everything You Need To Know:

What is a dwelling?
Who provides EPCs?
How long does an EPC last?
What does an EPC do?
What must the landlord do before letting a dwelling?
What must the landlord do before marketing the property to rent?
When must an EPC be obtained?
What happens if an EPC is not available within 7 days?
What is the responsibility of agents?
When must an EPC be provided?
How to hand over the EPC?
What about property particulars?
Who is responsible for an EPC?
What about emergencies?
What about tenancy renewals?
When is an EPC not needed?
For what types of property is an EPC required?
What is likely to be the impact of an EPC on the tenant?
How do you get an EPC?
How are EPCs enforced?
What about getting into the property to have an EPC prepared?
What happens if a property is sub-let?
What happens if the property was already on the market to let as at 5th April 2012?
Who can access EPC's?
Can I opt out of having my EPC data made publically available?

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Everything You Need To Know:

What is a dwelling?

An EPC is required whenever a dwelling is being rented out. “Dwelling” is a residential property which is self contained.  For these purposes a dwelling is self contained if it does not share essential facilities with another unit such as bathroom/shower room, toilet or kitchen.  It has to have its own entrance either direct from the outside or from the common parts (such as hall stairs or landings).  It is not self contained if access is via another unit. For more information about this see the section below “For what types of property is an EPC required”?

Who provides EPCs?

An EPC must be prepared by a registered assessor.   There are a considerable number of firms who produce EPCs.  Costs vary.

How long does an EPC last?

Once issued the EPC is valid for 10 years.  It can be used time and time again during this period. You do not have to have a new EPC even if you have work carried out to the property.   You can of course obtain a new one after work has been done.  If you do obtain a new EPC you can only use the latest version; not an earlier one. 

If the landlord already has an EPC for the property, e.g. because they have just bought it and an EPC was provided, this EPC can be used for subsequent rentals.  Likewise, the EPC provided when a newly constructed property was purchased can be used when renting the property out.

If the dwelling is converted so it contains more or fewer separate dwellings new EPCs will be required when each is rented out.

What does an EPC do?

An EPC shows two things.  It shows the energy efficiency (i.e. the running costs for the property) and it shows the environmental impact of the property (i.e. carbon dioxide emissions).  Each of these is rated A to G with A being the most energy efficient.  The A to G Scale is similar to that which is attached to refrigerators.  The average rating is likely to be D or E.

So far as energy efficiency/running costs are concerned there is a standardised way in which these are calculated based on the standard consumption of energy and also it is based on the cost of energy at the time the certificate is issued.   It is important to remember this when comparing EPCs for different properties prepared at different dates. 

The EPC will show the top actions which can be taken to save money/make the property more efficient.

Accompanying the EPC will be a recommendations report with suggested works to be carried out.  A landlord is not obliged to carry out any of these works.

What must the landlord do before letting a dwelling?

The landlord must:

• Commission and obtain an EPC from a registered assessor unless one is already available
• Make a copy of the EPC available to any prospective tenant free of charge
• Give the tenant a copy of the EPC before he/she signs the tenancy agreement (again free of charge).  This applies even if they have already seen it
• Prospective tenant/tenants must be shown/given a complete copy of the EPC including the recommendation report

What must the landlord do before marketing the property for rent?

The landlord must commission an EPC before it is marketed to rent. This means giving instructions for an EPC assessor to prepare the report and pay any fee required.

When must an EPC be obtained?

If you have a valid EPC already you can use this. If not a landlord must use all reasonable efforts to see that a valid EPC is obtained for the property before the end of the period of 7 days starting with the day on which the property was first put on the market to rent.

What happens if an EPC is not available within 7 days?

It is the responsibility of the landlord to use all reasonable efforts to obtain an EPC within 7 days of first marketing the property for rent. If this is not possible, this period is extended for an additional 21 days, i.e. there is an overall maximum of 28 days. However, this is not a licence to delay matters. It is the responsibility of the landlord to make sure that reasonable efforts are used to obtain the EPC and, if challenged, the landlord could be required to prove this to the satisfaction of Trading Standards.

What is the responsibility of agents?

It is the responsibility of a letting agent to be satisfied that an EPC has been commissioned for the property before marketing it for rent. Alongside the landlord, the letting agent must also use all reasonable efforts to secure that the EPC is obtained for the property within 7 days (this period can be extended up to a maximum of 28 days from when the property is first marketed as stated in the previous paragraph).

When must an EPC be provided?

A copy of the EPC must be made available to the prospective tenants at the earliest opportunity.  This means that they must be given the opportunity of looking at the certificate and reading it through.

As a minimum a copy of an EPC must be made available in this way to a prospective tenant:

• When somebody requests information about the property
• When someone makes arrangements to view the property
• When someone makes an offer to rent the property

At this stage you do not need to hand over a copy but you can if you wish.  Make available means that the EPC must be made available for the prospective tenant to look at it.

In any event a copy of the EPC must be made available to the tenant before the rental contract is entered into.
Additionally, the tenant must actually be given a copy of the EPC before the tenancy agreement is signed up.

There is an incorrect belief that the provision of an EPC can be delayed until shortly before the tenancy agreement is entered into. This has always been wrong but the Regulations have now been amended to make this clear.

How do you hand over the EPC?

An EPC can be sent electronically provided the tenant/prospective tenant agrees.  You should keep a record of handing over an EPC, whether this is done manually or electronically.  If done manually you should obtain written receipts.  Only a copy need be provided; not the original.

Please note that when there is an obligation either to make a copy of the EPC available or to hand over a copy of the EPC, it must be accompanied by the full recommendation report. There is a special rule for written property particulars where only the first page need be provided.

What about property particulars?

The rules for these have now been changed. Previously it was possible just to include the asset rating. This is no longer permitted. Where written particulars are published (whether in hard copy form or electronically) they must be accompanied by the first page of the EPC. Written particulars are defined as being any written description of the property which includes at least two of the following features:

• A photograph of the building (or any room in the building)
• A floor plan of the building
• The size of the rooms in the building
• The measured area of the building or
• The proposed rent

This will not extend to any hard copy advertisement or window display. It will apply to any hard copy hand out given to prospective tenants, where it has at least two of the above features included. If you do not have at least two of these features then you do not need to attach the EPC. If you put out written particulars containing a photograph and details of the proposed rent then it counts as written particulars so it must be accompanied by the EPC.

The position is different for electronic/online details. If they contain at least 2 of the features listed above they must be accompanied by an online copy of the first page of the EPC.
If you are making written particulars available electronically then a link to the EPC should be provided.

Who is responsible for an EPC?

The legal responsibility rests with the landlord but the landlord can arrange with the letting/managing agent to carry out these responsibilities.  However, responsibility for compliance would still remain with the landlord. The agent is also liable if he fails to comply with his responsibilities under the regulations.

What about emergencies?

There is a special rule for emergency accommodation but an EPC still has to be provided eventually.  This applies where a tenant needs an urgent relocation if there is no valid EPC available and there is insufficient time to commission one.  The requirement is still to provide an EPC as soon as is possible. 

What about tenancy renewals?

An EPC is not required for the renewal of a tenancy with the same tenant.  However, if there is a change in the tenants when the tenancy is renewed e.g. because one tenant moves out and is replaced by another.  A copy of the EPC should be provided to the new tenant before they sign up.

When is an EPC not needed?

EPCs are not required if, instead of letting a property out, you grant a licence.  For example if you have a lodger who occupies under a licence arrangement then no EPC would be required.  Legally, it is quite difficult to validly create a licence so this provision should not be relied upon, other than in cases where there is genuinely a licence in existence with the occupier, rather than a tenancy agreement.

An EPC is not needed currently  for  a non self contained property such as a bedsit – see further under the next section., nor  short term holiday accommodation, but may be extended to cover these as a result of recent Government proposals.

The requirement to make a copy of the EPC available to a prospective tenant does not apply where a landlord has reasonable ground to believe that a prospective tenant is:-

• Unlikely to have sufficient financial means to rent the dwelling
• Not genuinely interested in renting the dwelling of that particular type

It is important to note that none of these exemption provisions authorises the landlord to do something which is unlawful discrimination. 

For what types of property is an EPC required?

The rule is that an EPC is required for individual dwellings which, for these purposes, mean a self contained unit with its own kitchen toilet and bathroom behind its own front door.   An EPC is only required on a rental of a building or part of a building designed or altered to be used separately.

An EPC is not required for non self contained accommodation such as bedsits.  Renting out individual rooms in a building with shared facilities (e.g. the kitchen toilet or bathroom does not require an EPC).

WARNING – This is the interpretation put on matters by Government lawyers.  It may change.  It could be open to challenge.

An EPC is required as follows:-

• Individual house/dwelling (i.e. a self contained property with its own kitchen/bathroom facilities) – one EPC for the dwelling.
• Self contained flats (i.e. each behind its own front door with its own kitchen/bathroom facilities) – one EPC per flat.
• Bedsits (where there is a shared kitchen and/or bathroom) – no EPC is required.
• Shared flats/houses (e.g. a letting of a whole flat or house to students/young professionals etc) - one EPC for the whole house.
• Mixed self contained and non self contained accommodation – one EPC for each self contained flat/unit but no EPC for the remainder of the property.
• A room in a hall of residence or hostel - no EPC is required.
• Individual room in a flat or house (e.g. where a tenant rents a room so he/she has exclusive use of his/her bedroom and shared use of the kitchen toilet and bathroom) – no EPC.

What is likely to be the impact of an EPC on the tenant?

The Certificate gives the running cost/estimated costs based on standardised consumption and average fuel prices current with the EPC was produced.  Therefore, if tenants are comparing one EPC for one property with another you need to be aware of this, particularly when the EPCs are produced at different times. 

Some of the items in the EPC will clearly be under the tenants control e.g. amount of fuel consumed and others the landlord could change.  The recommendation report will set out lower cost measures (up to £500) and higher cost measures, measures above this figure.

One of the sections which is of particular interest to tenants is the section on cost effective measures and the potential impact on their fuel bills.

In 2008 extensive research by the Energy Efficiency Partnership for Homes found that once the purpose and benefits of reading the EPCs were explained to potential tenants that 88% would find EPCs useful when choosing a rental property and  that 26% would use it as the principal grounds for making an initial choice.  It was also found that 11% of tenants had moved from rental accommodation due to the high cost of heating the premises

When asked what are the main reasons to choose a property, potential tenants gave the following reasons with 5 of the 8 top reasons related to the energy efficiency of the property

Further research carried out by EEPH in 2009, six months after the requirement for EPCs came into force, found that ovrerall awareness amongst tenants was poor, but 23% of tenants who had moved after EPCs were introduced had read them and  asked their landlord to carry out measures to improve the energy efficiency.   Although landlords are not obliged to carry out any works, it may be worth considering carrying out the low cost measures to help improve the lettability of the property.

How do you get an EPC?

An EPC must be obtained from an accredited provider.  There is nothing to stop landlords undertaking the necessary training.  The EPC will be given to the landlord.  It will also be recorded on a central register.

How are EPCs enforced?

Local Authority Trading Standards is the enforcement authority.  There are fixed penalties for failing to provide an EPC/make one available when required.  The fixed penalty for dwellings is £200 per dwelling.  There is a six month time limit for any enforcement action to be taken.  There is a right for the landlord or agent to request that penalty notices are reviewed and ultimately there is a right of appeal to the County Court against a penalty notice.  Trading Standards have statutory powers to require production of an EPC from landlords/agents if they suspect an offence has been committed.  Investigation might follow if a tenant complains that he has not been given an EPC.  An EPC will still have to be provided even though a penalty is imposed. Trading standards can ask for evidence that an EPC has been commissioned before a property is first marketed.

What about getting into the property to have an EPC prepared?

Under the EPC regulations there is an obligation on occupants to co-operate to allow access.  Tenancy Agreements may also allow for access.  Obviously, prior notification needs to be given to tenants if an energy assessor is going to visit the property. 

What happens if a property is sub-let?

If a property is sub-let then responsibility will lie with the landlord under the sub-tenancy (i.e. the tenant) to provide an EPC.  The landlord is not in breach of the regulations if his tenant creates a sub-tenancy but fails to provide an EPC.  However, in this situation, the tenant is entitled to use any EPC which he receives from his landlord to pass onto the sub-tenant. 

What happens if the property was already on the market to let on 5th April 2012?

If the property was on the market to rent by 5th April 2012 the new rules do not apply.

Who can access EPCs?

All EPCs must be lodged on the National Energy Performance Certificate Register. From 22nd April 2012 this data is publically available. Individuals, local authorities etc can access the Register free of charge. Additionally, authorised organisations such as local authorities can have access to EPC data in bulk and identify which buildings have an EPC.

Can I opt out of having my EPC data made publically available?

Yes. You will need to contact the Register operator. You can also contact the mail and telephone preference services to register with them to stop marketing organisations accessing this information and contacting you.