The above regulations were introduced to implement an EU Directive and apply both to residential and commercial premises. These regulations impose: 1. A prohibition on landlords of residential property from unreasonably withholding consent to a tenant who wishes to make alterations that would improve the energy efficiency of the property notwithstanding the restrictions on alterations contained in the letting document. This measure came into force on the 1 April 2016. 2. A prohibition on landlords from letting their property if it has an EPC rating of F or G in any of the following situations:
- from 1 April 2018 where the landlord wants to grant a new lease, or renew or extend an existing lease whether residential or commercial;
- from 1 April 2020 for all residential property where the landlord has an existing lease in place;
- from 1 April 2023 for all other commercial properties where the Landlord has an existing lease in place.
Importantly the Regulations do not impose an obligation on landlords to make improvements to properties with energy efficiency ratings of F or G, but instead restrict the landlord from letting the property until at least an efficiency rating of E is achieved. Following Brexit, the government has to decide how they intend to proceed and there is no indication as yet, as to whether these regulations will be postponed, amended or repealed. So what should landlords be thinking about now in order to protect their position and ensure that they will be able to comply with the regulations should they remain in force without significant amendment. It may be worth considering the following:
- a right for the landlord to install meters so that energy performance can be monitored,
- a right of entry for the landlord for the purpose of making energy efficiency improvements,
- restricting a tenant from carrying out alterations which may worsen the efficiency rating,
- restricting a tenant from commissioning a new EPC or requiring it to use the same assessor as that used by the landlord to reduce the likelihood of a lower rating, and
- widening any service charge clause to enable a landlord to recover the cost of any energy efficiency works.