Domestic Landlord Guide – Chapter 1

The Regulations mean that a domestic private rented property in England or Wales should not be let if its energy performance indicator is below EPC E. 

This chapter is aimed at domestic landlords and outlines the factors landlords need to consider when determining if a property they let is covered by the minimum level of energy efficiency provisions. Enforcement authorities and others with an interest in domestic rented property will also find this information useful.

1.1 Domestic private rented sector (PRS) scope

1.1.1 Properties covered by the minimum level of energy efficiency provisions

The Regulations discussed in this guidance document apply to all domestic PRS properties in England and Wales which are:

1. let under certain types of domestic tenancy (see section 1.1.2 below) and
2. which are legally required to have an Energy Performance Certificate (EPC) (see section 1.1.4 below).

For the avoidance of doubt, this means that where a domestic private rented property meets these two conditions, it will be covered by the Regulations, irrespective of property type, length of tenancy, location, listed status, property size or any other characteristic. Conversely, where a property is let on a relevant tenancy type but is not legally required to have an EPC, or if it is required to have an EPC but is not let on a relevant tenancy, that property will not be covered and will not be required to comply with the Regulations.

Licence vs Tenancy

Please note, licences are not the same as tenancies, and a licence is not considered to be a tenancy for the purposes of the Regulations. A tenancy grants exclusive possession of the property, while a licence is merely permission for a licensee to do something on the property. If there are any concerns about whether a property is occupied under a licence or a tenancy, and whether the landlord is subject to the Regulations, legal advice should be sought.

1.1.2 Relevant Tenancies (regulation 19)

For the purposes of the domestic minimum standard provisions the relevant tenancy types are¹¹:

• An assured tenancy (including an assured shorthold tenancy) defined in the Housing Act 1988;
• A regulated tenancy defined in the Rent Act 1977;
• A domestic agricultural tenancy as set out in the Energy Efficiency (Domestic Private Rented Property) Order 2015¹² as follows:
  • A tenancy which is an assured agricultural occupancy for the purposes of section 24 of the Housing Act 1988;
  • A tenancy which is a protected occupancy for the purposes of section 3(6) of the Rent (Agriculture) Act 1976;
  • A statutory tenancy for the purposes of section 4(6) of the Rent (Agriculture) Act 1976.

Background information on common domestic tenancy types can be found here¹³ and at Appendix B.

Social Housing Exclusion

The minimum standards do not apply in the social housing sector. Therefore, even if a property is let on one of the tenancy types listed above, it will be excluded from the minimum standard provisions if it is either of the following¹⁴:

11 The tenancies in scope of the domestic minimum standard Regulations are defined in the Energy Act 2011, section 42

(1) (a) and the Energy Efficiency (Domestic Private Rented Property) Order 2015.

• legislation.gov.uk/uksi/2015/799/made
• gov.uk/private-renting-tenancy-agreements/tenancy-types
• The exclusion of social rented property is defined in the Energy Act 2011, section 42(2).
  • Low cost rental accommodation defined by section 69 of the Housing and Regeneration Act 2008 and the landlord is a private registered provider of social housing; or
  • Low cost home ownership accommodation within the meaning of section 70 of the Housing and Regeneration Act 2008.

A property will also be excluded if the landlord is a body registered as a social landlord under Chapter 1 of Part 1 of the Housing Act 1996.

1.1.3 Meeting the minimum standard, and sub-standard property

(regulation 22)

Where a domestic private rented property is legally required to have an EPC and is let on a tenancy type described at 1.1.2 above, it will meet the minimum standard if, from the trigger dates discussed at section 1.2.1, it has a valid EPC which shows that the energy efficiency rating for the property is E or above. Where a property is at EPC E or above, the property will be compliant with the Regulations, and the landlord will not be required to take any action.

A property is below the minimum level of energy efficiency, and is therefore defined as sub-standard and non-compliant by the Regulations, if there is a valid EPC which shows that the energy efficiency rating is below an E (i.e. it is an EPC rating of F or G). In this case the landlord will need to take steps to comply, either by improving the property to a minimum of EPC E (see chapter two), or registering an exemption on the PRS Exemptions Register, if they meet the criteria for an exemption (see chapter four).

1.1.4 Energy Performance Certificate (EPC) ratings

1.1.4.1 EPC Overview

As noted at the beginning of this chapter, alongside tenancy type considerations, the Regulations only apply to those domestic properties which are legally required to have an EPC. This means properties required to have an EPC by any of the following:

• The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007¹⁵,
• The Building Regulations 2010,
• The Energy Performance of Buildings (England and Wales) Regulations 2012.

Separate government guidance on EPC rules for domestic properties can be found here¹⁶.

Broadly speaking, since 2008 an owner or landlord has, on sale, letting or construction of a property, been required to make an EPC available to the prospective buyer or tenant (although in the case of construction projects, typically the person carrying out the work will supply the EPC)¹⁷. In addition to the above, a new EPC is likely to be necessary if a building is modified to have more or fewer parts than it originally had, and the modification includes the provision or extension of fixed services for heating, hot water, air conditioning or mechanical ventilation (i.e. services that condition the indoor climate for the benefits of the occupants). While some of the improvements which may be made to a property in order to comply with the Regulations may count as modification for the purposes of the EPC requirements, the majority will not.

Where an EPC is legally required for a property, then not having one is unlawful and could be subject to non-compliance penalties¹⁸. Local weights and measures authorities (usually through their trading standards officers) are responsible for enforcing the Regulations that require an EPC to be made available. The Ministry of Housing, Communities and Local Government (MHCLG) monitors enforcement activity through regular reports compiled and submitted by these authorities.

Further information on EPC requirements for dwellings can be found here¹⁹.

• The 2007 Regulations have been repealed. However the minimum standard Regulations still recognise valid EPCs which were required by the 2007 Regulations.
• gov.uk/government/publications/energy-performance-certificates-for-the-construction-sale-and-let-of-dwellings 17 Since October 2015, where a landlord hasn’t provided an assured shorthold tenant with an EPC, he or she won’t be able to evict them using a section 21 notice, the so-called “no fault” eviction procedure. Alongside the EPC, landlords are also required to provide tenants with a Gas Safety certificate, and a copy of the special “How to rent” guide. Failing to do so will make it more difficult to evict tenants. These requirements were introduced through the Deregulation Act 2015; more information on this is available at: www.gov.uk/government/publications/retaliatory-eviction-and-the-deregulationact-2015-guidance-note.  See also: www.gov.uk/government/publications/how-to-rent
• A property owner and/or landlord may be fined between £200 and £500 if they fail to make an EPC available to any prospective buyer or tenant.
• gov.uk/buy-sell-your-home/energy-performance-certificates

A sample EPC in PDF format is available at the following address:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/59 96/2116821.pdf.

Where a property already has a valid EPC, this EPC can be retrieved from the Domestic Energy Performance Certificate Register²⁰ (unless the owner has opted out of the EPC register).  You can search for the EPC by the property’s address²¹ or by the EPCs report reference number²².

When produced, an EPC will also be accompanied by a recommendations report setting out any energy efficiency measures which may be suitable for installation in the property²³. Answers to a range of frequently asked questions about EPCs can be found here²⁴.

1.1.4.2 EPCs -Ten Year Validity

Once an EPC is lodged on the EPC register (the EPC assessor is responsible for ensuring this happens) it is valid for a period of ten years.  A new EPC is not required each time there is a change of tenancy (or even when the property is sold), provided the earlier certificate is no more than ten years old. An owner, landlord or tenant will be free to commission a further EPC within that ten-year period if they choose. If a voluntary EPC of this type is produced and lodged for a

• epcregister.com/home.html
• epcregister.com/reportSearchAddressTerms.html
• epcregister.com/searchReport.html
• An EPC is valid where the data from which it may be produced has been lodged on the Energy Performance of

Building register less than ten years before the date on which it is relied on for these Regulations in accordance with the Energy Performance of Buildings (England and Wales) Regulations 2012 and it is the most recent EPC on the register for that property.

• epcregister.com/faq.html

property which is already legally required to have a valid EPC, then this new EPC will become the current one for the property, replacing the earlier one.

Once an EPC reaches the ten-year point and expires, there is no automatic requirement for a new one to be commissioned. A further EPC will only be required the next time a trigger point is reached, i.e. when the property is next sold, let to a new tenant, or modified in the manner described in section 1.1.4.1 EPC Overview above.

There is also no requirement to produce a new EPC after carrying out energy efficiency improvement works to comply with the Regulations. However, for the purposes of the Regulations, it is recommended that landlords do commission a fresh, post installation EPC. A new EPC will reflect the improvements made, alongside any change to the energy efficiency rating of the property. A post installation EPC will, in all likelihood, be the easiest way for a landlord to demonstrate that they have complied with the Regulations²⁵.

EPCs relate to the property rather than to the owner or occupier and remain valid irrespective of the owner. Therefore, an EPC obtained by a previous owner of the property will remain valid after a property is sold on, so long as it is less than ten years old. EPCs relate to the property rather than how it is used or occupied.  Therefore, an EPC obtained by a previous owner of the property will remain valid after a property is sold on, so long as it is less than ten years old.

1.1.4.3 EPCs and multi-let buildings

In some cases, particularly for buildings which may contain multiple selfcontained units which are let to different tenants, there may be multiple EPCs covering varying parts of the building. There may also be a separate EPC relating to the envelope of the building as a whole. These separate EPCs may provide varying energy efficiency ratings and, depending on circumstances, may have been produced at different times.

For the purposes of the minimum standard Regulations, the minimum EPC requirement is linked to the “property” being let which can be either a “[whole] building or part of a building”. In cases where the property being let is a discrete unit within a building (for example a room in a house share which is rented out on an individual basis), rather than the entire building, and where there is an EPC for the entire building, but also one for the discrete space being let, then the

25 Alternatively, a landlord would be able to demonstrate compliance by providing evidence that any energy efficiency improvements made since the EPC was carried out, were assumed to deliver the necessary SAP (standard assessment procedure) points to improve the property to band E or above.  So, for instance, on the EPC Energy Efficiency Rating, a property will be rated F or G if it has a SAP score of between 1 and 38; an E rating meanwhile will be awarded to a property with a SAP score of between 39 and 54.  If a landlord did not wish to commission a fresh post-improvement EPC they would, at the very least, need to be able to demonstrate that the improvement, or improvements, they had made were sufficient to boost the SAP score to a minimum of 39.  The recommendations report which accompanies a standard EPC sets out the rating a property is expected to achieve after installing individual recommended measures.

relevant EPC will be the one for the discrete space. Where there is only an EPC for the entire building (and where an EPC for the discrete space is not legally required) then that whole-building EPC will be the relevant EPC.

The landlord, then, should identify which EPC relates to the “property” that is subject to the relevant tenancy (or tenancies) and take action to improve the energy efficiency rating to the minimum standard, if necessary. A landlord should seek independent legal advice if they are in any doubt about which EPC is required.

As the relevant EPC will be the one related to the property being let, the landlord will only be required to install relevant measures which improve the energy performance of that property. In some cases, measures installed to improve the energy efficiency of a discrete space may also improve the energy efficiency of other spaces or units within a multi-let building. This is entirely acceptable.

 1.1.4.4 Circumstances where an EPC may not be required

Guidance²⁶ issued by the Ministry of Housing, Communities and Local

Government (MHCLG) notes that an EPC is not required where the landlord (or the seller, if relevant) can demonstrate that the building is any of the following:

• a building that is officially protected²⁷ as part of a designated environment or because of their special architectural or historic merit where compliance with certain minimum energy efficiency requirements would unacceptably alter their character or appearance;
• a building used as places of worship and for religious activities;
• a temporary building with a planned time of use of two years or less;
• Industrial sites, workshops, non-residential agricultural buildings with low energy demand and non-residential agricultural buildings which are in use by a sector covered by a national sectorial agreement on energy performance;
• stand-alone buildings with a total useful floor area of less than 50m² (i.e. buildings entirely detached from any other building); or
• HMO’s (Houses in Multiple Occupation, for example these can be bedsits, hostels, shared houses etc) which have not been subject to a sale in the previous ten years, or which have not been let as a single rental in the past ten years.
• gov.uk/government/publications/energy-performance-certificates-for-the-construction-sale-and-let-of-dwellings
• Listed buildings on the Historic England (or Welsh equivalent) at: https://historicengland.org.uk/listing/the-list/

Notes on EPC exemptions for domestic premises can be found here²⁸.

A building will also not need an EPC where the landlord can demonstrate that it is furnished holiday accommodation as defined by HMRC and the holiday-maker is not responsible for meeting the energy costs. Under certain circumstances buildings may also be exempt from the requirement to obtain an EPC where it may be demonstrated that they are to be demolished. This is subject to a number of strict conditions as set out in regulation 8 of the Energy Performance of Buildings (England and Wales) Regulations 2012. Further information on the definitions of the building types set out above is provided at Appendix C of this guidance.

There are no other exceptions to the EPC obligations although there may be some transactions which do not qualify as a sale or a letting.  If in doubt, legal advice should be sought. Please note that neither BEIS or MHCLG are able to provide specific advice regarding whether any of these EPC exemptions apply to specific properties.

1.1.4.5 Voluntary EPCs obtained for properties which are not legally required to have one

In situations where an owner or occupier of a building which is not legally required to have an EPC has obtained one voluntarily (i.e. a voluntary EPC for a property which has not been sold, let or modified within the past ten years), the landlord will not be required to comply with the minimum standard Regulations (and no exemption will be necessary, as the minimum standard Regulations will not apply to that property). A voluntary EPC may have been commissioned by a landlord who believed in error that one was required for their property, or it may be one commissioned by a property owner or occupant who simply wanted reliable advice on how to reduce energy waste.

A voluntary EPC may be registered on the official EPC database, but there is no requirement to do so. Where a voluntary EPC has been registered on the database it will supersede any earlier EPC that may have existed for the property, but official registration of a voluntary EPC will not, in itself, require the landlord to comply with the minimum standard.

However, if having acquired a voluntary EPC for a property they let, a landlord subsequently markets that property for let, that act will trigger the legal requirement for the property to have an EPC (and the EPC details will need to be displayed as part of the marketing material for that property). The landlord will be able to use the voluntarily obtained EPC to market the property (so long as the EPC is less than 10 years old), and the fact that the property is now legally

28 www.gov.uk/buy-sell-your-home/energy-performance-certificates

required to have an EPC will mean that the property will now be covered by the minimum standard Regulations (even though the EPC was initially obtained on a voluntary basis).

Listed Buildings and EPC Compliance

There is a common misunderstanding regarding listed buildings and whether they are exempt from the legal requirement to obtain an EPC. Listed properties, and buildings within a conservation area, will not necessarily be exempt from the requirement to have an EPC when they are sold or let and it will be up to the owner of a listed building to understand whether or not their particular property is required to have one. Where a listed domestic private rented property, or a property within a conservation area, is required to have an EPC, that property will be within scope of the minimum energy efficiency standard and will need to be compliant (complying means either being at a minimum of EPC band E, or having a valid exemption registered for it). If a property is not legally required to have an EPC, then that property will not be covered by the minimum standard Regulations, and no exemption will be necessary.

Guidance issued by the Ministry of Housing, Communities and Local Government (MHCLG) on EPC requirements²⁹ states:

[B]uildings protected as part of a designated environment or because of their special architectural or historical merit are exempt from the requirements to have an energy performance certificate insofar as compliance with minimum energy performance requirements would unacceptably alter their character or appearance.

To comply with minimum energy performance requirements, many of the recommendations in an EPC report e.g. double glazing, new doors and windows, external wall insulation, and external boiler flues would likely result in unacceptable alterations in the majority of historic buildings. These can include buildings protected as part of a designated environment or because of their special architectural or historical merit (e.g. listed buildings or buildings within a conservation area). In these cases, an EPC would not be required.

Building owners will need to take a view as to whether this will be the case for their buildings. If there is any doubt as to whether works would unacceptably alter the character or appearance of a building, building owners may wish to seek the advice of their local authority’s conservation officer.

29 www.gov.uk/government/publications/energy-performance-certificates-for-the-construction-sale-and-let-of-dwellings

In all cases, it is vital that a landlord understands whether their property is legally required to have an EPC at any time from 1 April 2018 onwards and whether it is or is not exempt from having to comply with the minimum level of energy efficiency provisions. If there is any doubt about whether a property (or the building it is in) is legally required to have an EPC (or whether an existing EPC is legally required or voluntary), or about any of the other criteria described above, advice should be sought from the local trading standards team.

EPC Requirements, Ten Year Validity and the Minimum Energy Efficiency Standard

The following scenarios are provided as illustrative examples, highlighting the ten-year validity of an EPC and the interactions with the minimum standards:

Scenario one:

A landlord intends to let a property on a new tenancy from 1 April 2019: If the property already has an EPC which is less than ten years old then this EPC can be used to let the property. If there is no EPC, or if there is an EPC which is more than ten years old, then the landlord will be required to obtain a new EPC to market and let the property. If the EPC (whether new or existing) shows an energy efficiency rating of F or G then the landlord will need to carry out energy efficiency improvement works (with a maximum value of £3,500) sufficient to improve the property to a minimum of E, or register a valid exemption if applicable, before issuing a tenancy agreement.

Scenario two:

A property let on a ten-year assured tenancy with an EPC rating of F, where the EPC was legally required and was obtained in 2015:  On 1 April 2020 (the minimum standard “backstop” date – see section 1.2.1) the landlord is continuing to let the property and will have to comply with the minimum energy efficiency provisions. This is because there is a valid, legally required EPC for the property (the EPC will continue to be valid until 2025) and the minimum standard “backstop” date has been reached.

Scenario three:

An EPC F rated property let on a twenty-year tenancy where the EPC was obtained in 2009:  On 1 April 2020 the landlord is continuing to let the property, but in this scenario, the property will not be captured by the minimum energy efficiency provisions because the EPC will have expired during 2019, and there is no legal requirement on the landlord to obtain a new one at that point (because the tenancy is ongoing). The landlord will only be required to obtain a new EPC (which will trigger a need to comply with the minimum energy efficiency provisions) if they intend to remarket the property for let once the current tenancy expires, or if they (or their tenant) modify the property in a manner which would require a new EPC to be obtained.

Note: Landlords will wish to be aware that the calculation methodologies underpinning EPCs are updated periodically to account for new performance data (the methodology for existing dwellings is called the Reduced Data Standard Assessment Procedure, or RdSAP). This means that, depending on the characteristics of a particular building, or unit within a building, the EPC band may change irrespective of any improvement works undertaken. Therefore, even if an EPC for a property is current (i.e. less than ten years old), the landlord may wish to obtain advice as to the rating that would apply to the building if a fresh EPC were commissioned, before deciding on a particular course of action in relation to compliance with the Regulations.

RdSAP was last revised in late 2017, to encompass the latest developments in energy efficiency technology and other developments in the sector.

1.2 When do the minimum level of energy efficiency provisions apply?

1.2.1 Prohibition on letting sub-standard domestic property

(regulation 23)

The domestic minimum standard is being introduced in a phased manner, with triggers for new tenancies entered into from 1 April 2018 onwards, and a “backstop” date of 1 April 2020 for all remaining tenancies.

This means that, from 1 April 2018 onwards, landlords must not grant a new tenancy, or renew or extend an existing tenancy agreement to let EPC F or G rated domestic property, unless either:

• the landlord has made all the relevant energy efficiency improvements that can be made to the property (or there are none that can be made) and the property’s energy performance indicator is still below an EPC E, and this exemption has been registered on the PRS Exemptions Register; or
• no improvements have been made but a valid exemption applies which has been registered on the PRS Exemptions Register.

Then, from 1 April 2020, landlords must not continue to let a sub-standard domestic property, even to existing tenants (where there has been no tenancy renewal, extension or indeed new tenancy), unless:

• all relevant energy efficiency improvements have been made (or there are none that can be made), the EPC remains below E, and the situation has been registered on the Exemptions Register; or
• no improvements have been made but a valid exemption applies and has been registered on the PRS Exemptions Register.

So, since 1 April 2018, where a landlord intends to let a domestic property (or from 1 April 2020 continue to let such a property) they need to check whether their property is covered by the minimum level of energy efficiency provisions (as discussed above), and, if so, ensure that the EPC rating is at E or above (as discussed at section 1.1.3 above). If the EPC rating is below E, the landlord must either take appropriate steps to improve the rating to meet the minimum standard (see chapter two for more details) or register an exemption, if one applies (see chapters four and five for details on exemptions).

Meaning of “grant a new tenancy”

A tenancy is granted on the date a binding tenancy agreement is entered into between the landlord and the tenant. A binding tenancy agreement is a contract in which all the terms and conditions of the tenancy are finalised and there is an intention to vest exclusive possession to the tenant, either immediately or at a future date. Therefore, the grant of the tenancy becomes effective on the date all the terms and conditions are agreed, even where the date on which the tenant is permitted to take up possession of the property is subsequent to the date on which the tenancy is granted.

For example, if a tenancy was granted before 1 April 2018 but the tenant took possession of the property on or after 1 April 2018, the landlord would not be subject to regulation 23. Providing the Landlord does not grant a new tenancy, or renew or extend the existing tenancy on or after 1 April 2018, the landlord will have until 1 April 2020 to improve the property’s rating to an E (or register an exemption, if one applies).

1.2.2 Subletting of domestic property

The responsibility for not letting a domestic property below EPC E applies to any person who lets, or proposes to let, a domestic private rented property. If the original tenancy allows a tenant to sublet the property, and that tenant proposes to enter into a sub-tenancy as a new landlord to a sub-tenant, then that original tenant/new landlord should not let the property until the minimum standard is reached, or until a valid exemption has been registered.

In the case of subletting, an original tenant/new landlord may (subject to the terms of their tenancy) need to obtain consent from their superior landlord before making improvements to meet the minimum standard. Note that from 1 April 2020, there is a continuing obligation on all domestic landlords to ensure the requirements of the Regulations are met (even where there has been no change or renewal of a tenancy), so the superior landlord should have already taken steps to improve a property to E before a post April 2020 subletting occurs.

Tenant obtaining landlord consent

Where a tenant is looking to improve the energy efficiency of a property in preparation for renting that property to a sub-tenant (or for any other reason), that tenant may be required to obtain landlord consent before making the improvements.

The tenant should request consent from their landlord in the way specified in their tenancy agreement. If the landlord consents, then the work may proceed, subject to any conditions which the landlord may have placed on the tenant. However, if the landlord withholds consent (or fails to respond to the request), then the tenant may have recourse to the Tenants’ Energy Efficiency Improvements provisions in Part 2 of the Regulations. Under these provisions tenants can request consent from their landlord to install energy efficiency improvements in the property they rent, and the landlord may not unreasonably refuse consent. These rights took effect from April 2016, and are subject to the tenant securing suitable funding for the requested improvements.

Guidance on the Tenant’s Energy Efficiency Improvements provisions can be found here. ³⁰

The extent to which a tenant is allowed to sublet a property will depend on the specific provisions of their particular tenancy. Even where subletting is permitted, the tenancy may make specific provision for which party would be liable for improvement costs in any given situation. For this reason, superior landlords, sub-landlords and tenants are advised to consult their tenancy, and seek their own advice, when considering their rights and responsibilities under their tenancy.

Readers should also note that there are clear differences between subletting (where a tenant may become a landlord for the purposes of the Regulations), and arrangements such as assignment. In situations which do not result in the tenant becoming a new landlord for the purposes of the Regulations, any requirement to meet the minimum standard will remain with the original landlord. Again, appropriate legal advice should be sought if there is any doubt.

Example Subletting Scenario

The following scenarios are provided as illustrative examples, highlighting the way the minimum standards will apply to sub-letting scenarios pre and post April 2020.

In both scenarios the original tenant is the tenant of an F rated property where the tenancy was entered into before April 2018.

Scenario one – pre-April 2020

If the original tenant sublets the property during 2019 or early 2020, liability for compliance with the minimum standard sits with that tenant (who is now a landlord) as that (original) tenant is now the landlord for the tenancy which has triggered the need to comply with the minimum standard.

Scenario two – post April 2020

If the original tenant intends to sublet the property after 1 April 2020 (after the backstop date has come into force), the original landlord should already have taken steps to either improve the property to a minimum of E, or register an exemption, if one applies. If this has not taken place then the

30 www.gov.uk/government/publications/tenants-energy-efficiency-improvements-provisions-guidance-for-domesticlandlords-and-tenants

original tenant will be unable to lawfully sublet the property until steps have been taken (either by the landlord, or by the original tenant on the landlord’s behalf) to rectify the situation.

If the landlord has not improved the property to E (or higher) by 1 April 2020 (or registered a valid exemption) they will be in breach of the Regulations for continuing to let a “sub-standard” property and may be subject to enforcement proceedings (see chapter six for more details on enforcement).

1.3. Mixed use properties and tenancy types

There will be situations where a landlord will be a landlord of a property which includes a mix of residential and commercial units, and a mix of commercial and residential tenants. Examples will range from a building with a shop on the ground floor and one or two flats on the upper floors, to larger buildings with a number of commercial units on the ground floor and multiple residential flats on the upper floors.

The Regulations apply to rented properties within such mixed-use buildings, although the triggers may be different depending on whether particular units are domestic or non-domestic. In many cases the distinction between the commercial and the residential units will be clear; however, there may be instances where a mixed-use property is let as a single unit. Where such a property falls below an EPC rating of E, the landlord will need to examine the tenancy to determine whether the property is domestic or non-domestic for the purposes of the Regulations and whether it is required to comply with the minimum standard, and if so, by which trigger date³¹.

Where a mixed-use property is rented on an assured tenancy (including an assured shorthold tenancy) for the purposes of the Housing Act 1988, a regulated tenancy under the Rent Act 1977, or a domestic agricultural tenancy under the Energy Efficiency (Domestic Private Rented Property) Order 2015, then it is likely to be considered a domestic property and should be treated accordingly.

If a privately rented property is let under a tenancy but is not considered a

“dwelling”, then it will be considered a non-domestic private rented property for

31 If a property is not required to comply with the minimum standard then the landlord will not be required to take any action. However, enforcement authorities have powers to issue landlords with compliance notice requesting information if they suspect that an F or G rated property is within the scope of the minimum standard. Therefore, landlords are advised to retain copies of any documentation they used to reach their decision so that, if they are issued with a compliance notice, they can demonstrate to the enforcement authority that their property is outside of the scope of the minimum standard and is not required to meet the E standard. See Chapter six for further information on compliance notices.

the purposes of the Regulations³², and will need to comply with the minimum standards in accordance with the non-domestic trigger dates. In all cases it will be for the landlord to check their tenancy arrangements to understand what type of tenancy is in place, and they should seek appropriate legal advice if there is any uncertainty as to whether a property falls within the domestic or non-domestic category³³. Landlords may also wish to discuss any concerns with the relevant enforcement authority before determining any course of action.

The Housing Health and Safety Rating System (HHSRS)

While not directly related to the minimum level of energy efficiency, landlords should be aware of the Housing Health and Safety Rating System (HHSRS). The HHSRS is used to assess health and safety in residential properties, and was introduced by the Housing Act 2004. It assesses a range of potential hazards, including damp, excess cold and excess heat and categorises them according to seriousness.

Local authorities have strong powers under the Housing Act 2004 to tackle poor property conditions which may impact peoples’ health. They must take enforcement action where the most serious hazards are present.

If a local authority identifies a serious “category 1” hazard, it has a duty to take the most appropriate action. It may also take action for less serious category 2 hazards where this is considered the most satisfactory course of action. The HHSRS does not deal with a property being inefficient from an energy point of view; rather, action can be taken if there is excess cold or damp at the property, for example, but these two hazards can overlap in a situation where a property needs improvement from an energy efficiency perspective.

Depending on the case, local authorities may aim to deal with problems informally at first, but if this is unsuccessful they may take legal action against a landlord requiring them to carry out improvements to the property; for example, by installing central heating and/or insulation to improve cold properties. Where a legal notice is served under the Housing Act 2004, the landlord will have to meet the cost of the required work.

While some landlords of F and G rated rental properties may be able to claim valid exemptions from the requirement to improve a property to EPC E, this exemption will not excuse them from meeting the existing obligation keep their property free from serious hazards.  Failure to do so may result in

• According to section 42(1)of the Energy Act 2011.
• Guidance to landlords of non-domestic property on complying with the non-domestic minimum standard can be found at: www.gov.uk/government/publications/the-non-domestic-private-rented-property-minimum-standard-landlord-guidance

Guidance for landlords and Local Authorities on the minimum level of energy efficiency required to let domestic property under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, as amended.

This section is a distillation of the published Government regulations and was correct at the time of incorporating within the GO LOCAL EPC site. For a copy of the full original document please select this link THE DOMESTIC PRIVATE RENTED PROPERTY MINIMUM STANDARD.  This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated.