Private Rented Sector Energy Efficiency Regulations: what they mean for tenants
Posted by Alex Steeland on 15 May 2015 at 11:15 am
The private rented sector makes up 18 percent of the total housing stock and contains some of the worst maintained properties in the country, with 1 in 10 privately rented domestic properties falling below EPC band E. The barriers to overcoming this problem are particularly challenging, given the split incentives between landlord and tenant: the costs of energy efficiency improvements are borne by landlords, while the benefits (lower energy bills) accrue to the tenant. This problem is likely to be all too familiar to those of you who rent.
The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 were passed in March 2015. These regulations enable tenants, from 1 April 2016, to request energy efficiency improvements from their landlord and set a minimum energy efficiency standard of EPC band E which must be met in order for landlords to grant a tenancy to new or existing tenants from 1 April 2018.
So if you’re a tenant, what energy efficiency improvements will you be able to request from your landlord and how? The first point to note is that the energy efficiency improvements must be “relevant”. “Relevant energy efficiency improvements” are improvements that can be installed at no up-front cost to the landlord.
The regulations set out the cases in which this requirement will be met, including where the improvements can be wholly paid for pursuant to a green deal plan, by means of funding provided by central government, a local authority or any other person, by the tenant making the request, or by a combination of the specified financial arrangements.
While there appears to be little restriction on the type of energy efficiency improvements that can be requested, there are exemptions and instances when a landlord can refuse a request even if the measures could be installed at no up-front cost. This is the case when, for example, the requested improvements could negatively impact on the fabric or structure of the property or would result in a reduction of more than 5 percent in the market value of the property.
In terms of the process involved, if you’re a tenant and wish to request relevant energy efficiency improvements, you will need to serve a written notice on your landlord requesting their consent to the improvements. This notice will need to specify the improvements for which the consent is sought, including written confirmation of any necessary third party consent and, where relevant, accompanied by any reports recommending the measures and evidence of funding secured to install the improvements.
If the improvements are to be funded wholly or partly by a green deal plan, you will need to identify the green deal installer, and if not, a copy of a quotation for the works must be included with the notice. You will also need to specify any works you will undertake yourself to make good the property after the improvements are installed (like repainting), and confirm any works you are proposing to wholly or partly fund yourself.
And what can you expect from your landlord in return? The regulations require the landlord to provide a full written response stating whether they consent to the improvements. Landlords will have the option of making a “counter proposal” specifying one or more alternative improvements. However, the landlord will have to demonstrate that the measures in the “counter proposal” achieve equivalent energy bill savings as those measures outlined in the tenant’s request and that the alternative measures would not lead to additional costs to the tenant. The tenant must consent to the “counter proposal” in order for the landlord to implement it.
These new regulations offer a great opportunity for tenants to more readily benefit from warmer, more comfortable homes and lower energy bills, although the extent to which this opportunity is delivered will depend on the detail and how the regulations play out in practice. There has been some concern that loopholes in the regulations could limit their impact, but they undoubtedly remain a great step forward.
So what should I do now, I hear you ask. Well probably not much for the moment except keep your eyes open for more news. It is certainly worth thinking about what measures you would like to request, and perhaps even having a green deal assessment so that you are ready for action as soon as the regulations come into force.
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