The Private Rented Sector Energy Efficiency Regulations have been laid before Parliament and DECC has published its response to the associated consultation. As anticipated, from 1 April 2018, before granting a tenancy private domestic and non-domestic landlords must ensure their properties have at least an E EPC rating, or have made those energy efficiency improvements that can be funded using Green Deal finance or other subsidies.
DECC’s response clarifies that the regulations will exclude non-domestic property which is let on a tenancy granted for a term of 6 months or less (provided the granting of the tenancy does not mean the tenant will have occupied the property for over 12 months), and property let on a tenancy for 99 years or more. All non-domestic property types will be covered, except for those which do not require Energy Performance Certificates under the EPC regulations.
Landlords may be able to let properties which do not meet the minimum standard of an EPC “E” rating. For example where they can show that the measures are not cost-effective (as defined in the regulations) or where, despite reasonable efforts, the landlord cannot get the necessary consents to carry out energy efficiency improvement works, say from tenants, lenders or superior landlords.
From 1 April 2018, the regulations will apply upon the granting of any new lease, including renewal to an existing tenant. From 1 April 2023, the regulations will apply to all privately rented property in scope of the regulations, including where a lease is already in place and a property is occupied by a tenant.