Domestic Landlord Guide – Chapter 4

The following chapter sets out information on the exclusions and exemptions from meeting the minimum standard which are permitted by the Regulations.  

Please note that any exemptions from the prohibition on letting sub-standard property which are claimed by a landlord may not pass over to a new owner or landlord upon sale or other transfer of that property. If a let property is sold or otherwise transferred with an exemption in place, the exemption will cease to be effective and the new owner will need to either improve the property to the minimum standard at that point, or register an exemption themselves where one applies, if they intend to continue to let the property.

Any notice served by a landlord, a tenant, or a third-party under the Regulations, including where the landlord is approaching a third-party to obtain consent to make an improvement, must be made in writing. A notice may be sent by post; however, e-mail and other electronic communication is also acceptable. Where the notice is sent to a body corporate, the Regulations state that it may be addressed to the secretary or clerk at that body corporate, although it would be best practice for the party in question to send any correspondence to the most relevant contact at the organisation, including any named individual with whom the landlord typically corresponds with regard to the tenancy. Where a notice or other communication is sent to a partnership, the Regulations state that it may be addressed to any partner or a person who has control or management of the partnership business (regulation 3).

Please Note: if a landlord is intending to register an exemption because a “relevant energy efficiency improvement” cannot be installed, the exemption may only be registered if the improvement in question is the only “relevant improvement” which can be made to the property.

For example, if several “relevant improvements” have been identified, and one of these would require planning consent, and planning consent is subsequently sought and refused, the landlord should take steps to make the other improvements which do not require planning consent, rather than register a “consent exemption” and neglect those improvements which are viable.

4.1 Exemptions

4.1.1 Where all the “relevant energy efficiency improvements” for the property have been made (or there are none that can be made) but the property remains sub-standard (regulation 25)

The requirement to meet the minimum level of energy efficiency (EPC E) does not apply where a landlord has made all the relevant energy efficiency improvements to the property that can be made within the £3,500 cap (inc. VAT)

(or there are none that can be made⁴⁶), and the property remains sub-standard (Please see section 2.1 in chapter two for the definition of “relevant energy efficiency improvements”.)

In other words, even if the measure or package of measures purchased and installed by the landlord does not improve the property to EPC E, the landlord need not take any further action if there are no additional measures which can be selected without pushing the overall costs above the £3,500 cap (inc. VAT).

If this is the case, then the situation must be registered on the PRS Exemptions Register and supported by the necessary evidence (see table one in chapter five for information on evidence requirements). The exemption will last five years; after five years it will expire and the landlord must try again to improve the property’s EPC rating to meet the minimum level of energy efficiency. If this cannot be achieved, a further exemption may be registered.

There will also be occasional instances where no energy efficiency improvements have been recommended for a property on an EPC or other advice report. In these cases, this exemption category should be selected on the Exemptions Register, reflecting the fact that there are no energy efficiency improvements which ‘can be made’ to that property.

“No cost to the landlord” provision change

Removal of the “no cost to the landlord” provision:

The original Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 included a “no cost to the landlord” provision, which permitted landlords to register a “no cost to the landlord” exemption on the PRS Exemptions Register where they were unable to make improvements to their sub-standard property at no cost to themselves.

46 “None that can be made” means that no energy efficiency improvements have been recommended for the property on an EPC or other advice report.

Once registered, “no cost to the landlord” exemptions were valid for five years.

However, this “no cost to the landlord” provision is no longer available as of

1 April 2019. The changes made to the Regulations by the Energy

Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2019 include a capped landlord’s contribution requirement in the event of the non-availability or insufficiency of third-party funding.

Validity of existing “no cost to the landlord” exemptions:

Any “no cost to the landlord” exemption registered between 1 October 2017 and 31 March 2019 will now end on 31 March 2020, instead of extending for five years as previously. Therefore, landlords who had registered such “no cost to the landlord” exemptions must make the necessary improvements (up to the value of the cap, if applicable) to ensure their property meets EPC E (or as close as possible) by 1 April 2020.

All landlords who have registered “no cost to the landlord” exemptions prior to 1 April 2019 will be contacted personally via the PRS Exemptions Register to alert them in good time to the adjusted exemption length. The PRS Exemptions Register will be updated by the Government so that all “no cost to the landlord” exemptions are automatically cancelled on 31 March 2020, and the landlord alerted of this electronically.

4.1.2 Where a recommended measure is not a “relevant energy efficiency improvement” because the cost of purchasing and installing it would exceed the £3,500 cap (inc. VAT) (“high cost” exemption).

The prohibition on letting property below an EPC E does not apply if the cost of making even the cheapest recommended improvement would exceed the £3,500 cap (inc. VAT). (See 2.1.2 in chapter two for information and examples on landlord self-funding).

If this “high cost” exemption applies, the landlord must register this on the PRS Exemptions Register. To support this exemption, the landlord must provide evidence in the form of three quotations from different installers, each showing that the cost of the cheapest recommended improvement exceeds the £3,500 cap (inc. VAT). Copies of these three quotes must be uploaded onto the Exemptions Register. Once registered, the exemption will be valid for five years; after which time it will expire and the landlord must try again to improve the property’s EPC rating to meet the minimum level of energy efficiency. If this still cannot be achieved, then a further exemption may be registered.

Please note: this exemption should only be used where there are no improvements which can be made for £3,500 or less (and analysis suggests that the majority of EPC F and G rated properties can receive at least one improvement for this amount or less). If one or more recommended improvements can be made for £3,500 or less, and these improvements fail to improve the property to EPC E, than the exemption which should be registered is the one described at 4.1.1 above where: ‘All the “relevant energy efficiency improvements” for the property have been made but the property remains substandard’

4.1.3 Relevant energy efficiency improvements - wall insulation (regulation 24(3))

The Regulations recognise that certain wall insulation systems cannot, or should not, be installed in certain cases even where they have been recommended and where the costs do not exceed £3,500 (or where third-party funding can be secured to cover the costs of installing them). Therefore, there is special provision for cases where cavity wall insulation, external wall insulation systems, and internal wall insulation systems should be installed in a property (see chapter three for some further technical advice on the potential impacts of insulation on a building).

The special provision is that a recommended energy efficiency measure is not considered to be a relevant measure where it is:

• cavity wall insulation, external wall insulation or internal wall insulation (for external walls); and
• where the landlord has obtained written expert advice which indicates that the measure is not appropriate for the property due to its potential negative impact on the fabric or structure of the property (or the building of which the property forms a part).

The expert advice the landlord provides must be obtained from one of the following independent experts:

• an architect registered on the Architect Accredited in Building Conservation register;
• a chartered engineer registered on the Institution of Civil Engineers’ and the Institution of Structural Engineers’ Conservation Accreditation Register for Engineers;
• a chartered building surveyor registered on the Royal Institution of

Chartered Surveyors’ Building Conservation Accreditation register; or

• a chartered architectural technologist registered on the Chartered Institute of Architectural Technologists’ Directory of Accredited Conservationists.

Alternatively, if the advice is not, or cannot be, obtained from one of the above experts, advice may be obtained from an independent installer of the wall insulation system in question who meets the installer standards for that measure, as set out in Schedule 3 to the Building Regulations 2010⁴⁷, as reproduced at Appendix E of this document.

Please note: the Regulations (in regulation 2) define an “independent” expert or installer as a person who is not a spouse or civil partner of the landlord or superior landlord.

Where the landlord is a company rather than an individual person, then an independent expert or installer must be someone who is not, and has not been in the last 12 months:

• a director, partner, shareholder or employee of, or other person exercising management control over, the landlord or the superior landlord; or
• a spouse or civil partner of a person falling within the sentence above.

If a landlord intends to rely on the special provisions relating to wall insulation in order to let a sub-standard property, they must register the property and all required information on the PRS Exemptions Register (see table one in chapter five for more information).

4.1.4 Third-party consent exemption (regulation 31)

This exemption applies where the landlord:

• needed consent from another party, such as a tenant, superior landlord, a mortgagee, freeholder (if the landlord in question is a leaseholder of the property being let) or planning or listed building consent, and despite their reasonable efforts they could not obtain that consent, or the consent was given subject to conditions they could not reasonably comply with; or
• could not carry out the proposed improvements without the consent of the tenant or tenants of the property, and one or more of the tenants refused to give consent.

47 www.legislation.gov.uk/uksi/2010/2214/pdfs/uksi_20102214_en.pdf

Certain relevant energy efficiency improvements may legally require third-party consent before they can be installed. Such improvements may include external wall insulation or solar panels which can require local authority planning consent in certain instances, consent from mortgage lenders, or other third-parties. Consent from a superior landlord may be required where the landlord is them-self a tenant. Consent may also be required from the current tenant of the property or other tenants depending on the provisions of the tenancy or tenancies. Where third-party consent is required for a particular measure, the landlord must identify this requirement and make, and be able to demonstrate to enforcement authorities on request, “reasonable effort” to seek consent.

Green Deal finance: “tenant consent” exemption change

Please note: prior to 1 April 2019, domestic landlords were able to register a “tenant consent” exemption where a sitting tenant refused to consent to a Green Deal finance plan for funding improvements. With effect from 1 April 2019, regulation 31 is amended so that domestic landlords no longer have this option. (NB. The option remains for non-domestic landlords.) From 1 April 2019, where a domestic landlord has secured Green Deal finance but a sitting tenant withholds their consent to the plan, the landlord cannot claim an exemption on that “consent withheld” basis and must seek alternative means of financing the required improvements, including landlord self-funding.

However, where a sitting tenant in an EPC F or G domestic property withholds their consent to the landlord making energy efficiency improvements for any other reason (for example, because they believe the “hassle factor” will interfere with their enjoyment of the property), the landlord can still register a consent exemption on this basis.

It is not practical to provide an exhaustive list of all situations where third-party consent could apply. Information on when and where consent is required will be contained within relevant documentation for the property, for example in the landlord’s lease or mortgage condition documents, or within the current tenancy agreement. If a landlord is in any doubt about whether consent is required for a measure in their property, they should seek appropriate advice.

Landlords are also strongly advised to speak to their local authority planning department if they are in any doubt about whether planning consent is needed to implement a particular improvement, particularly where the building to be improved is listed or within a conservation area.

Tenant Consent to Energy Efficiency Improvement Works

One issue which landlords should consider is whether they have the right to carry out improvement works under the terms of an existing tenancy.  Landlord rights of entry to undertake work on a property typically only extends to the carrying out of repairs or maintenance, rather than making “improvements”. As a majority of the measures landlords can install to meet the minimum standard will be considered improvements, a landlord may not have an automatic right of entry to install the measure or measures, and tenant consent may be necessary.

On the other hand, if the tenancy agreement specifically gives the landlord right of entry to undertake “improvement works”, tenant consent may not be necessary. In all cases the wording of individual tenancies will dictate what is and is not permissible without consent.

A landlord may let a sub-standard property where they can demonstrate that they have been unable to improve its energy efficiency rating to at least EPC E because they could not obtain one or more necessary consents. If this applies, the landlord must register the exemption on the PRS Exemptions Register. The landlord will then be exempt from the prohibition on letting sub-standard property for five years from the date the exemption is registered, or, where lack of tenant consent was the issue, until the current tenancy ends or is assigned to a new tenant.

Please note: where a particular improvement cannot be made due to consent considerations, but where there are other relevant improvements which can be made, and for which consent will not prove a barrier, the landlord must (subject to any of the other exemptions and exceptions) still install these, and may not rely on the consent exemption in relation to them.

Reasonable Efforts to Obtain Consents

The Regulations require the landlord to make “reasonable efforts” to obtain third-party consent. Reasonable efforts may include attempts on a number of separate occasions and using a number of different available means of communication to secure agreement from, for example, a tenant or superior landlord, with evidence to show this has been done (in the case of planning consent refusal, evidence of a single application and subsequent refusal is likely to be sufficient evidence).

Broadly speaking, it is thought that it will not be reasonable for the landlord to comply with a condition which may reduce the landlord’s ability to let the property or if it involves unreasonable costs. Where the landlord does not agree with an enforcement authority’s review of a penalty notice, he or she can appeal to the First Tier Tribunal.

4.1.5 Property devaluation exemption (regulation 32 and regulation 36 (2))

An exemption of five years from meeting the minimum standard will apply where the landlord has obtained a report from an independent surveyor who is on the Royal Institution of Chartered Surveyors (RICS) register of valuers⁴⁸ advising that the installation of specific energy efficiency measures would reduce the market value of the property, or the building it forms part of, by more than five per cent. This exemption provides a safeguard for landlords in situations where energy efficiency measures might significantly impact upon the property’s commercial value, although the government expects this exemption will apply infrequently.

A surveyor’s report prepared to support this exemption must clearly state all the recommended relevant energy efficiency measures for the property that would lead to it being devalued. In such cases a landlord will still be required to install any relevant improvements recommended for their property that are not covered by the surveyor’s report (unless another exemption applies).

Where the property cannot be improved to EPC E because certain energy efficiency measures will devalue the property, and the landlord intends to rely on an exemption to comply with the Regulations, the landlord must register the exemption. Details of the registration of an exemption on the PRS Exemptions Register are provided in chapter four.

48 The Royal Institution of Chartered Surveyors’ register of valuers may be accessed via their website:

http://www.ricsfirms.com/ .  Please note that the RICS register contains the details of surveyors covering a range of disciplines, therefore landlords seeking a valuation report for the purposes of a property devaluation exemption are advised to check that any valuer they intend to instruct is competent to carry out a valuation of this type.

After five years the exemption will expire and the landlord will again need to try to improve the property to meet the minimum standard, or register another valid exemption.

4.1.6 Temporary exemption due to recently becoming a landlord

(regulation 33 & regulation 36 (2))

The Regulations acknowledge that there are some limited circumstances where a person may have become a landlord suddenly and as such it would be inappropriate or unreasonable for them to be required to comply with the Regulations immediately. If a person becomes a landlord in any of these circumstances (set out below), a temporary exemption from the prohibition on letting a sub-standard property, or on continuing to let a sub-standard property, will last for six months after the date they become the landlord and will apply from that date.

The circumstances are:

• the grant of a lease due to a contractual obligation (this is intended to cover a situation where a contract was entered into on a contingent basis, regardless of whether it was entered into before or after the Regulations came into force);
• where the tenant becomes insolvent and the landlord has been the tenant’s guarantor (in this situation, the tenant’s guarantor becomes a landlord when taking over the lease);
• the landlord has been a guarantor, or a former tenant, who has exercised the right to obtain an overriding lease of a property under section 19 of the Landlord and Tenant (Covenants) Act 1995 (for the avoidance of doubt, a “guarantor” who exercises this right under the 1995 Act is the guarantor of a former tenant);
• a new lease has been deemed created by operation of law;
• a new lease has been granted under Part 2 of the Landlord and Tenant Act 1954;
• a new lease has been granted by a court order, other than under Part 2 of the Landlord and Tenant Act 1954.

Additionally, from 1 April 2020, when the minimum standard applies to all domestic private rented properties that are occupied by tenants, a temporary exemption of six months will apply from the date from which a person became a landlord in the following situation:

• A person becomes the landlord on purchasing an interest in a property and, on the date of the purchase, it was let on an existing tenancy.

In all cases landlords are advised to obtain their own independent legal advice if they are unsure about whether any of these temporary “recent landlord” exemptions apply in their case. Where a landlord does intend to rely on one of these exemptions, they must register the exemption on the PRS Exemptions Register (see table one in chapter five for more details) at their earliest opportunity. After six months the exemption will expire and the landlord must either have improved the energy efficiency of the property to at least EPC E, or have registered another valid exemption, if they intend to continue letting.

Solid walls can be insulated – either from the inside or the outside. They will cost more than insulating a standard cavity wall, but the savings on heating bills may be greater too. There are many benefits to solid wall insulation; however, there are a number of points the landlord should consider:

• Internal wall insulation will need any problems with penetrating or rising damp to be fixed first;
• Internal wall insulation might require pipework and other building services to be moved;
• External insulation is not recommended if the outer walls are structurally unsound and cannot be repaired;
• External insulation requires good access to the outer walls;
• External insulation may need planning permission - check with your local council.

In instances where a local planning authority requires planning permission to install solid wall insulation, and will not grant permission to install on a particular domestic private rented property, solid wall insulation will not have to be installed.

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.