For landlords
From 1st October 2008 it has been mandatory for an assessor to conduct a survey of the rented property for the production of an EPC.
The landlord/owner of the property bears the cost of the EPC. Estimates suggest that there are approx. 2.5 million homes in the rental sector which are affected by this legislation.
When buildings are to be rented out, the landlord is responsible for ensuring a valid certificate is made available to all prospective tenants.
The EPC and recommendation report must be made available free of charge by the landlord to a prospective tenant at the earliest opportunity and no later than:
When any written information about the building is provided in response to a request for information received from the prospective tenant; or when a viewing is conducted; or
If neither of those occur, before entering into a tenancy agreement.
An energy performance certificate does not have to be made available if:
The seller believes that the prospective tenant is unlikely to have sufficient funds to rent the property or is not genuinely interested in renting that type of property; or
The landlord is unlikely to be prepared to rent out the property to the prospective tenant.
Notes
• An EPC is required whenever a building (with a roof, walls and uses energy to condition the indoor environment) in the social or private rented sectors is let to a new tenant.
• A building can be: the whole of a building; or part of a building where the part is designed or altered to be used separately. For residential purposes, ‘designed or altered to be used separately’ describes a unit that is self-contained, meaning that it does not share essential facilities such as a bathroom/shower room, wc or kitchen with any other unit, and that it has its own entrance, either from outside or through common parts, that is not through another dwelling.
• EPCs are valid for 10 years and can be reused as many times as required within that period. It is not necessary to commission a new EPC each time there is a change of tenant. However, once a more recent EPC has been produced for a dwelling, it will always supersede an existing one. Thus, where a number of EPCs are obtained for a property within the 10 year period only the most recent one is valid.
• The landlord must commission an EPC and ensure a copy of it, including the recommendation report, is available (for inspection at least) free of charge to prospective tenants at the earliest opportunity. As a minimum, this should be when prospective tenants are first given written information about a dwelling or are arranging to view it, and before any rental contract is entered into. A copy of the EPC (rating and recommendation report) must be given free of charge to the person who ultimately becomes the tenant before any rental contract is entered into.
• The landlord should maintain an auditable trail of communication to show: whether a tenant has agreed to receive an EPC electronically; and whether they have in fact received it.
• If a landlord already has an EPC for a property, for example because it was recently purchased and the EPC was part of the HIP, this EPC can be used for the subsequent rental. EPCs are valid for 10 years from the date of its production for rental purposes but only for three years if it is to be used for a Hips related sale.
• If the landlord has failed to provide an EPC to a tenant, or fails to show an EPC to an enforcement officer when asked, Trading Standards can issue a notice with a penalty charge of £200.00 per dwelling. In addition to paying the penalty notice, the landlord will still have to provide an EPC to the person who has become the tenant.
• A pro active approach to EPC compliance means having them in advance of the trigger points at which they would be needed. For example, if a landlord has a block with a high turnover of tenants, then producing EPCs in advance of the requirement will mean that these are on hand to give to new tenants as they are offered accommodation and will reduce any impact on void times. It should be borne in mind however that a proactive approach typically requires surveys of tenanted properties and if any difficulties are encountered in gaining access, the need to make repeat visits could increase costs.
• A reactive approach means producing EPCs as and when they are needed. If there is no EPC in place when a tenant leaves, then one will need to be produced before the accommodation is next made available to prospective tenants.
• A landlord cannot charge for the provision of the original EPC. However it is permissible for a tenant who has already received the EPC to be charged for the provision of a copy document.
• Where a tenant sub-lets a dwelling, the responsibility to make the EPC available lies with the sub-leaseholder.
• There may be occasions when it is possible to offer a dwelling for rent before the EPC is available. However this should not be the norm. The landlord will be expected to have made contact with a DEA and commissioned the EPC with a view to receiving it within two weeks of the date it was commissioned.
• If the tenant wants to purchase the dwelling they rent, the same EPC can be used. This is because it is a non-marketed sale not affected by the Hips Regulations. An EPC is required but this can be up to 10 years old. However, if the dwelling is also being placed on the open market, the EPC must be no more than three years old because it is affected by the Hips Regulations.
• If the agreement between the parties expressly allows for a short period of holiday occupation only and no intention to create a tenancy can be inferred, then an EPC is not required.
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