Energy Performance Certificates estimate the amount of energy needed for a property by rating it between A (very efficient) to G (inefficient). From 1 April 2018, the Government is introducing minimum energy standards of E for all rented properties. A Landlord will be unable to let a property on a new contract from this date if it falls within the rating of F or G.
Also, from 1 April 2016, a tenant whose property falls within rating band F or G can request that the property be brought within a minimum rating of band E. The Landlords must then increase the energy standards or face a penalty notice.
Landlords who do not improve energy ratings within 3 years’ time will be unable to let on a new contract. It may, therefore, be in their interests to assess potential cost at this stage.
A tenant should be made aware that should a Landlord be required to make improvements, the costs may be passed to the tenant through service charges. It may be necessary for a tenant to check the repairing covenant in their lease.
In the long term, the aim of the government by 2030 is for all rented properties to fall within band C.
For expert advice on commercial leases (for both landlords and tenants) contact David Redgate.
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