Since January 2009, individuals or businesses with buildings in the UK that are offered for sale or rental have been legally required to provide an EPC. The legal obligation happens “as soon as a building is in the process” for sale or rental such as verbal enquiries for building particulars and requests for viewings.
The specific time that the requirement is triggered means that a Landlords EPC must be made available to any prospective tenant at the earliest opportunity – before entering into a lease or agreement to lease, when written information about the building is given to someone who requests it and when the building is viewed by a prospective tenant.
The EPC and the Recommendation Report must be provided to prospective tenants at no charge. When a building is marketed, the EPC rating must be included within all marketing literature (including lease particulars and all advertising). If the EPC is not included within such marketing, estate agents are automatically reported to the Office of Fair Trading (OFT).
It is the building owner’s responsibility as landlord (or their managing agent’s) to provide an EPC. Not doing so could lead to the Local Authority Building Control department seeking enforcement action against you as well as risking a fine of between £500 and £5,000. Since an EPC is valid for ten years, there is good reason to act as soon as possible as, in April 2018, it will be unlawful for a landlord to let a property with an energy performance rating below E.
EPC for Landlords
In relation to domestic EPCs, there are fixed penalties for failing to provide a Landlord EPC or make one available when required – £200 per dwelling. Again, landlords of domestic dwellings should bear in mind that from October 2015, if an EPC was not provided with a new tenancy, they will not be able to seek possession using a section 21 notice until a valid EPC has been served. Domestic lettings include individual houses and self-contained flats, shared flats and houses on a single tenancy agreement and mixed accommodation including self-contained and non-self-contained properties (in relation to bedsits or room lets with shared kitchens and bathrooms or halls of residence, no EPC is required).
When advertising a property to let, the advertisements must contain the EPC rating for the property. If a photo of the building or any room inside the building is advertised along with a floor plan or description of the dimensions of the rooms, this will trigger the need for an EPC rating to be shown. With window cards and newspaper adverts there is no legal obligation to include the EPC rating graphs, however, it has been submitted that it would be good practice to do so.
Aside from the obligations and penalties, there is good evidence to suggest that ‘greener’ properties with accurate EPCs offer considerable benefits to occupiers, reflected in higher rents. It is also becoming popular for major tenants (particularly commercial ones) to consider their ‘green’ credentials as part of their environmental or corporate responsibility. Other benefits include being able to attract a tenant quicker and, based on the fact that an EPC lasts for ten years, you can have your building ready to let faster with an EPC already obtained, as well as ready for any rent review that comes around. The right sort of tenant is also more likely to be attracted to landlords who take the EPC seriously, such a tenant being one that is looking to remain on a long-term basis, in this sense, expenditure in tenant turnover can be reduced.
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