LANDLORDS - ARE YOU AWARE OF LATEST ENERGY EFFICIENCY RULES? Mon 07 Nov 2016

Landlords are legally responsible for the safety of their tenants.
Landlords are legally responsible for the safety of their tenants.

LANDLORDS - ARE YOU AWARE OF LATEST ENERGY EFFICIENCY RULES?

Landlords are legally responsible for the safety of their tenants. For instance, under the Smoke and Carbon Monoxide Alarm Regulations 2015,  which came into force in October 2015, landlords in England have to install a smoke detector alarm on the ceiling of a hallway or landing on all storeys (except mezzanines) of their letting properties. In addition, each room containing a solid fuel appliance, such as an open fire or log-burning stove, must have a carbon monoxide (CO) detector at head height on a wall or shelf between 1m and 3m from any source of potential leakage. The type of alarm is not stipulated in the regulations but lithium batteries with a 10 year guarantee or hard-wired smoke alarms are recommended for properties built after June 1997.

Regulations apply to any tenancy, lease or licence of letting property in England giving somebody the right to occupy all or part as their only or main residence but does not include lodgers living with a landlord and family, or those in long leaseholds and social housing.

Both alarms must be in working order on the first day of every new tenancy - not a continuation of an existing tenancy. Confirmation in writing by the tenant  that the alarm is in working order at the beginning of the  tenancy is required. Failure to comply with these rules can result in a fine for the landlords of up to £5,000.

It is also strongly recommended that tenants check the alarms are functioning correctly at least monthly.

If a tenant refuses access for an alarm to be fitted or tested,   the landlord should explain in writing (with a copy sent to the local authority) that the work is a legal requirement and carried out for their own safety.

Although working CO or smoke alarms in older or non-licensed dwellings are not a legal requirement, the newly created Department for Business, Energy and Industrial Strategy expects reputable landlords to ensure they’re fitted if gas appliances are installed.

Landlords and their agents letting property with gas fittings have three main responsibilities in order to comply with the Gas Safety (Installation and Use) Regulations 1998:-

a) maintenance: pipework,  fittings  and chimney/flues must  be maintained safely with appliances serviced in accordance with manufacturers’ recommendations, otherwise  a Gas Safe  engineer must service them annually; b) gas safety checks: a gas safety check should be carried out at least annually on each gas appliance/flue by a registered engineer to ensure appliances and fittings are safe to use;  and c) record: a record of annual gas safety checks should be provided to existing tenants within 28 days of completion, or to new tenants at the start of their tenancy. If the rental period is less than 28 days at a time, a copy of the record can be displayed in a prominent position inside the property with copies retained for at least two years.

If landlords or their agents fail to provide tenants with a valid gas safety certificate they could not only face a fine of up to £6,000 but will be unable to rely on a section 21 Notice to gain possession of their properties at the end of the tenancy.

The Energy Efficiency (Private Rented Property England and Wales) Regulations 2015 have been in force since April 1st 2016. An EPC,  which is valid for 10 years, is required for all tenancies and, if not, a  fine of up to £200 could be payable and landlords or their     agents may be unable to  serve a section 21 Notice to gain possession at the end of a tenancy.

Private rented sector tenants, including those in longer term assured and regulated tenancies living in private rental property with EPC ratings of ‘F’ and ‘G,’ now have the right to request energy efficiency improvements such as insulation, cavity wall filling and new boilers. Landlords will then be legally obliged to bring the property up to at least an ‘E’ rating if there are no upfront costs.

Tenants could opt to pay for the works themselves although long leasehold covenants will have to be respected.

Landlords (or agents acting on their behalf) may qualify for a limited exemption of up to 5 years for the works where finance is not available through the Green Deal or grant funding, according to law firm Trowers and Hamlins, as quoted on the RICS website. Breaches of the regulations may attract a fine of £2,000 which could rise if non-compliance continues for 3 months or more. The Residential Landlords Association is concerned that from 2018 members who let out up to 330,000 older properties will have to pay between £1,800 and £5,000 each to comply.

Although tenants should benefit from energy bill savings, costs incurred by landlords may be passed on in higher rents. It will be unlawful under Minimum Energy Efficiency Standards (MEES) to let out a property under a new tenancy with less than an ‘F’ or ‘G’ rating from April 2018.

By April 2020, all let properties must conform to a minimum ‘E’ rating (including previously existing tenancies) and, by 2030, a minimum ‘C’ rating will apply to all properties.
 
It seems planning for energy improvements sooner rather than later would be a good idea as landlords will be required to do so anyway in the not-too-distant future. Loft, external or cavity wall insulation for newer properties, ‘smart’ storage heaters and LED light bulbs are all good examples of cost-efffective measures which should improve energy efficiency and reduce bills in the longer term.

Although carrying out the work will place upward pressure on rents,  landlords are likely to improve the value of the property as well as  enjoy better relationships with present and future tenants.

Other landlord obligations - for homes in multiple occupation, consumer data and deposit protection, money laundering, health and safety,  electricity/ fixed wiring, plumbing and appliances, fire,  legionella, drugs (including cannabis farms), brothels etc have not gone away!
 
Breaches of these rules and/or failure to carry out annual maintenance or safety checks can result in criminal convictions for landlords or agents including manslaughter charges if, for instance, defects in heating systems are found to be dangerous.

Further information from chartered surveyor and ARLA-qualified letting agent Jeremy Leaf, who has been advising landlords and tenants on successfully renting and managing hundreds of properties as well as avoiding problems for over 30 years, would certainly be a great place to start!

Jeremy Leaf
A former RICS Residential Chairman and Independent North London Estate Agent
Winter 2016

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