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 produce an Energy Performance Certificate - which will give details of the property's energy efficiency and environmental impact - before putting the property on the market.
If landlords don't produce an Energy Performance Certificate before they market a property to new tenants, they risk incurring unnecessary fines and they may also be prevented from marketing their property to tenants in the future, 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.
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 introduced Energy Performance Certificates to 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.
In the case of a property investment that is being let out, an Energy Performance Certificate includes the following information:
An Energy Performance Certificate is needed when a building is built, sold or let out, and is valid for ten years.
A landlord must make sure that a valid Energy Performance Certificate is available to all of their prospective tenants.
Landlords only need to provide an Energy Performance Certificate for properties that they are marketing to new tenants. They don't need to get Energy Performance Certificates for current tenancies or renewals to the same tenants.
EPCs are required for self-contained properties only. They are not necessary when a tenant rents a room and shares facilities.
Since 2008 landlords had to provide an EPC before a tenancy agreement was entered into to rent out the property or, if sooner, when a prospective tenant was supplied with written information about the property or viewed the property.
But since 6 April 2012 the EPC rules have changed. Under the current rules, an EPC must be made for all properties before they can be put on the market (whether residential or commercial lettings).
Landlords must use "all reasonable efforts" to obtain the EPC within seven days of the property being put on the market. If the EPC isn't obtained within those seven days, landlords have 21 additional days.
At the end of this period landlords are in breach of the regulations, and can be penalised accordingly, even if they can demonstrate that they used all reasonable efforts to obtain the EPC.
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.
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Published on: April 7, 2012