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 brought in for larger domestic properties with four 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. Over ten years later, we contemplate the requirement for EPCs and consider the implications for rented properties.
Energy Performance Certificates are valid for ten years. Some of the earliest EPCs are now over 11 years old and are now classified as ‘expired’. 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 a new EPC is required once it expires.
Expired Energy Performance Certificates
The Energy Performance of Buildings (England & Wales) Regulations 2012 state 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.
When do I need a new Energy Performance Certificate?
Once an EPC has expired, a new one 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 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 Rightmove, Zoopla or Prime Location will qualify – but if a landlord tells someone in the pub about a property they are going to rent, this also falls into ‘otherwise communicated’ and an EPC should have been commissioned.
Equally, if an Energy Performance Certificate has expired and a group of tenants in one household are looking to replace one member, a new EPC must be commissioned as a new tenant will be joining.
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 that are 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. The MHCLG has instructed that Landmark must store EPCs for 20 years.
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 may offer the advantage of a better rating.
Should a new EPC be commissioned, whether it is legally required 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, a new EPC is not required but may be helpful 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.
How have Energy Performance Certificate assessments changed?
The methodology underpinning the calculations of energy performance certificates 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.
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. It is also worth noting that if your property is a listed building, it may be exempt from EPC requirements.