In August 2007 Energy Performance Certificates (EPCs) were introduced as part of the now defunct Home Information Packs under Part 5 of the Housing Act 2004. Initially introduced for larger domestic properties with 4 or more bedrooms which were marketed for sale, the requirement was gradually extended to smaller properties and eventually included rental properties from 1 October 2008. Now 10 years on from the requirement to provide EPCs some of these EPCs are now expiring. We consider some implications for rented properties.
EPCs are, of course, valid for 10 years. Some of the earliest EPCs are now 11 years old and are now classified as ‘expired’. Some of the earlier EPCs commissioned for lettings after 1 October 2008 will now, or will soon be, expiring too. An EPC is valid for either sales or lettings, so whilst it may have been commissioned for the purpose of a sale, the same EPC would be valid for the purpose of letting the same property. With the lifespan of an EPC in mind, one question now being repeatedly asked is whether, when the EPC expires, is a new one required?
The updated regulations, The Energy Performance of Buildings (England & Wales) Regulations 2012 state, as did the previous version, that an EPC is required to be commissioned before a property is marketed. In later regulations, this became known as a ‘trigger point’. This does not mean though that a new EPC is required each time the property is marketed for sale or let, as long as the EPC remains valid whilst advertising.
So, for example, the EPC is dated 1 May 2008, the most recent tenancy started 1 February 2018, at which point the EPC was still valid. It has, however, now expired. If the tenancy is going to continue beyond the expiry of the EPC with the tenant still in situ, then a new EPC is not required as the property is not being marketed for sale or for let.
Which is the relevant date?
EPCs display two dates one being the date of assessment and the other being the certificate date. It is likely that the certificate date will either be the same as, or closely follow, the assessment date, but occasionally we have seen dates several months if not years apart. Landmark has clarified that the 10 years starts ticking from the certificate date. After the EPC expires the copy on the EPC register is marked as an expired report. Landmark advises that MHCLG has instructed that Landmark must store EPCs for 20 years.
When do I need a new EPC?
Once an EPC has expired a new EPC is only legally required when a new trigger point is reached i.e. before the property is next marketed for sale or for let. For clarity, a new EPC is not required simply because an EPC has expired.
Deciding what is relevant marketing may not be straightforward though. The Energy Performance of Buildings (England & Wales) Regulations 2012 does tell us in regulation 7 (6)(c) that ‘a fact is made public when it is advertised or otherwise communicated (in whatever form and by whatever means) to the public or a section of the public’. Without doubt marketing a property on one of the internet portals will qualify but if a landlord tells someone in the pub about a property they are going to rent also falls into ‘otherwise communicated’ and an EPC should have been commissioned. Equally, if after the EPC has expired, where one of the joint tenants is being replaced and the remaining tenants are advertising for a replacement, then a new EPC must be commissioned.
The EPC ratings are based around three core criteria, those being the efficiency of the insulation, heating and lighting. The insulation considers whether and to what extent the walls, roof and floor are insulated and the type of glazing. The heating considers how the property and the water are heated and the lighting considers the percentage of lighting using low energy lighting at fixed outlets. Improved loft insulation, a new boiler condensing boiler or new low energy bulbs will all have a positive effect upon the energy performance rating although some improvements will have a more positive effect than others. This is detailed in the recommendations section of the certificate.
Where the EPC rating is currently an E or above there is currently no immediate need to make improvements though this may change as we approach 2025. If, however, a boiler change is required then getting a new EPC, and in all likelihood, an improved rating is not required but might offer the advantage of a better rating. Should a new EPC be commissioned, whether it is legally required to be commissioned or not, which is then placed on the register, it replaces the previous EPC and the 10 year validity starts again. If, however, a property is being improved in order to reach an E rating to comply with the Minimum Energy Efficiency Standard then whilst a new assessment is not required there would be no better way to demonstrate compliance.
It is permitted to market a property that does not meet the minimum standard E rating but if a tenancy is started without actually achieving the minimum standard or an exemption is registered, then a breach has occurred. Your property must now meet MEES requirements for 2018.
How have EPC assessments changed?
The methodology underpinning the calculations of EPCs are known as RDSAP or Reduced Data Standard Assessment Procedure. For the vast majority of residential
properties these RDSAP tests are perfectly adequate. If, however, your property is somewhat out of the ordinary then the RDSAP results may give a poor rating for an extremely energy efficient property because, for example, the technologies are not recognised, for instance in the original software triple glazing was not an option. In this situation, a full SAP test may be required. In order to ensure that newer technologies and improvements in our understanding are taken into account, the tests are periodically revised. One recent update was in November 2017 following a study which identified that solid walled properties do not lose as much heat as had been previously thought. The effect, therefore, is to lift the scores for solid walled properties, that may then raise the overall rating.
There’s a possibility that the EPC rating for properties with older EPCs may not now be the true rating. This may be particularly important for those perhaps with a high F rating who may now achieve the minimum standard by simply having a new EPC commissioned.
For those considering commissioning a new EPC we would suggest that any recommended improvements identified on the original EPC are carried out in advance of the new assessment. With the stated ambition of raising the minimum standard, achieving a higher rating now may well be less expensive than trying to achieve it in five years’ time. Also worth noting that there are some exceptions. If you are the landlord of a listed building, you may not need an EPC.
Where will we be in 2028?
Energy performance certificates are an EU wide requirement. At the time of writing it is not clear where we will be at the end of the Brexit negotiations. Regardless of the outcome, the current Government, and we would imagine any future Government, will have an objective of improving living standards. The energy performance of buildings will be one way to contribute to that objective. We would, therefore, anticipate that Government will push ahead with the ambition of a Minimum Energy Efficiency Standard of D in 2025 with a further improvement to C beyond that. If you’re lucky enough to still have his current tenant in situ in 2028 the EPC will probably be expired. Under current regulations, we’ll still be saying that a new EPC is not required until reaching the next trigger point.
Have you Got An Energy Performance Certificate?
Does your property have an up to date EPC? You can check the EPC register here and if not, we can provide you with an EPC. We are also currently offering a Free EPC for anyone taking out our Rent On Time package.