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New landlords: have you got an energy performance certificate?

Over half of all landlords are still unaware of their legal requirement to provide prospective tenants with an Energy Performance Certificate (EPC).

Any landlord who is marketing a self-contained property to new tenants has to provide an Energy Performance Certificate - which will give details of the property's energy efficiency and environmental impact - to those tenants considering entering into a tenancy agreement.

If landlords don't provide their new tenants with an Energy Performance Certificate, they risk incurring unnecessary fines and they may also be prevented from marketing their property to prospective tenants, which could result in their properties being empty for a period of time.

Also, with the recent large increases in gas and oil prices, tenants will be very aware of the cost of running a property, so landlords are more likely to let out their property (and perhaps obtain a higher rent!) if the Energy Performance Certificate shows that the property is cost effective.

But what are Energy Performance Certificates? Here is our lowdown on what they do, what they contain and when landlords need one.

What is an Energy Performance Certificate?

An Energy Performance Certificate is needed whenever a building is built, rented out or sold. The purpose of the certificate is to record how energy efficient a property is as a building. The Energy Performance Certificate provides a rating of the energy efficiency and carbon emissions of a building from A to G, where A is very efficient and G is very inefficient.

The government's idea by introducing Energy Performance Certificates is that they will help prospective buyers, tenants, owners and occupiers to easily compare the energy efficiency of one building with another building of the same type, so that they can consider fuel costs and energy efficiency as part of their investment.

An Energy Performance Certificate is always accompanied by a report that recommends how the energy rating of the building can be improved, as well as information about the rating that could be achieved if all of the recommendations were made.

What does an Energy Performance Certificate contain?

In the case of a property investment that is being let out, an Energy Performance Certificate includes the following information:

• Reference information - the type of property (e.g. house or flat), the unique reference number (as stored in the central register) and the date of the Energy Performance Certificate.
• Estimated energy use – an estimate of the fuel costs needed to light and heat the property. This can only be an estimate as the actual energy use depends on the individuals occupying the building.
• Energy assessor information – the name of the assessor, the company's name (or the trading name if they are self-employed), their accreditation number and their contact details.
• Complaints information – how to complain and how to check that the Energy Performance Certificate is authentic.
• Energy advice – guidance on how to run the property in an energy-efficient manner.
• Recommendation report – information on how to improve the property's energy ratings. This includes guidance on what cost-effective improvements can be made and what other measures can be made to improve the rating of the building (that are not necessarily cost effective). Each recommended improvement will outline the cost involved in making the improvement; the savings that can be made each year; and the performance rating of the property once the improvement has been made. The potential rating shown on the Energy Performance Certificate is based on all of the cost effective recommendations being implemented.

When is an Energy Performance Certificate required?

An Energy Performance Certificate is needed when a building is built, sold or let out. It's valid for ten years, except for residential sales where a Home Information Pack (HIP) is needed instead. In these cases an Energy Performance Certificate cannot be more than a year old when the property is first put on the market.

A landlord must make sure that a valid Energy Performance Certificate is available to all of their prospective tenants from 1 October 2008. The Energy Performance Certificate and recommendation report must be made available free of charge by a landlord to their tenant at the earliest opportunity and no later than:

• when any written information about the building is given in response to a request for information received from a prospective tenant; or
• when a prospective tenant views the property; or
• if neither of those occur, before the landlord enters into a tenancy agreement to let out the property.

Make a tenancy agreement now!

An Energy Performance Certificate doesn't have to be made available if:

• the landlord believes that the tenant is unlikely to have enough money to rent the property; or
• they are not genuinely interested in renting that type of property; or
• the landlord is unlikely to rent out the property to the prospective tenant (although this doesn't permit unlawful discrimination).

From 1 October 2008 landlords will only need to provide an Energy Performance Certificate for properties that they are marketing to new tenants. They will not need to get Energy Performance Certificates for current tenancies or renewals to the same tenants.

Where can you get an Energy Performance Certificate and what happens if you don't have one?

A landlord can only obtain an Energy Performance Certificate from a licensed Domestic Energy Assessor (DEA). The cost of an assessor producing an Energy Performance Certificate is between £65 and £100 for one.

If landlords, or letting agents, don't have a valid Energy Performance Certificate, they risk being reported to their local Trading Standards office and also the Office of Fair Trading. They may be fined up to £5,000 and they may lose the right to operate.

How can you make your property more energy efficient?

Here are our top tips:

• Insulate your property - cavity wall insulation and loft insulation are simple and cheap ways of reducing the property's heating bills.
• Replace your boiler – if it's over 15 years' old, it might be time to change it. New boilers are far more energy efficient and a combi boiler is good if you have limited space.
• Put in double glazing – it can help to reduce your heating costs.
• Replace appliances with new energy efficient ones – always buy appliances which display the Energy Saving Recommended logo.
• You can get more information on Energy Performance Certificates from the Energy Efficiency Advice Centre (tel. 0800 512 012). They can give you a free home energy check, as well as details of grants in your area.

Read more on how landlords can prevent void periods with an EPC.

Published on: July 1, 2008