Under new EU legislation from the 1st October 2008, when buildings are to be rented out, the landlord is responsible for ensuring a valid certificate is made available to all prospective tenants.
So you act ahead of the game and commission an EPC from a domestic energy assessor, but what do you do with it now. I hear you ask how and when should I supply the Energy Performance Certificate?
The
Energy Performance Certificate (EPC) and recommendation report must be made available free of charge by the seller or a landlord to a prospective buyer or tenant at the earliest opportunity and no later than:
* when any written information about the building is provided in response to a request for information received from the prospective buyer; or
* when a viewing is conducted; or
* if neither of those occur, before entering into a contract to sell or let.
An energy performance certificate does not have to be made available if:
* the seller believes that the prospective buyer or tenant is unlikely to have sufficient funds to purchase or rent the property or is not genuinely interested in buying or renting that type of property; or
* the seller or landlord is unlikely to be prepared to sell or rent out the property to the prospective buyer or tenant (although this does not authorize unlawful discrimination)
The complexities of the Energy Performance of Buildings Directive (EPBD) legislation is starting to be seen as the above mentioned date approaches and landlords implement the Energy Performance Certification of their properties. It is becoming widely acknowledged and understood that a typical self contained flat or house will require an
EPC.
However, there are certain circumstances where EPCs are not needed or must be obtained to a greater degree than one would have initially imagined. The following are scenarios given as examples by the department of Communities and Local Government (DCLG).
Case study 1
A house or flat is rented by a number of tenants who have exclusive use of their bedrooms but share a kitchen and bathroom. In this case each tenant has a contract with the landlord for the parts they have access to, but not for a whole dwelling. An EPC is therefore not required each time a tenant moves, although one will be required for the whole house if it is sold, rented as a whole or constructed.
Case study 2
A group of friends rent a property and there is a single contract between the landlord and the group as the contract is for the rental of a whole dwelling. An EPC is required for the whole dwelling. In this case, a dwelling is taken to be a domestic building which is either the whole of the building or a part altered or designed for separate use.
Case study 3
Individual tenants rent rooms in a hall of residence. Each room does not constitute a building or part of a building designed to be used independently or separately. An EPC is not required, for each individual room. However, an EPC will be required on the whole building if it sold, rented or constructed. It will also be required on self-contained units within the hall, e.g. a self-contained caretaker's flat, if this is sold, rented or constructed.
These are great to compare your individual circumstances with to gauge your new upcoming obligations. If in doubt there is a new EPC helpline that has been recently established tel no. 0845 3652468.
Many landlords are taking a proactive approach towards commissioning Energy Performance Certificates for their properties and not waiting to the last minute which could mean longer periods without tenants due to the EPC being required before marketing can commence.
Within each Energy Performance Certificate there will often be recommendations of energy efficiency improvements which correlate with the
Landlord Energy Saving allowance (LESA ) scheme. This scheme is a taxable allowance for energy efficient improvements. Landlords are able to apply for energy efficiency grants/allowances and have been able to since the Landlord's Energy Saving Allowance (LESA) scheme was introduced on 6th April 2004 and then later expanded upon.
The improvements that Landlords can make through the energy saving allowance; will in most cases have a direct positive impact on the energy efficiency rating of the Energy Performance Certificate. Of course, the energy saving measures would need to be put in place prior to the assessment taking place for this to be evidenced on the EPC. However, some EPC providers do offer a pre-assessment and assessment service. This enables landlords to make improvements based on the Energy Performance Certificate recommendations and receive additional certification reflecting these upgrades to the property.
The Landlord Energy Saving Allowance (LESA) allows individual landlords (and other landlords who pay income tax) who let residential property to claim a deduction in their income tax bill. This allowance allows landlords to claim back up to £1,500 per property for installing energy efficient measures and is available until 2015.
You are currently entitled to claim for the following measures:
* loft insulation
* cavity wall insulation
* solid wall insulation
* draught proofing
* hot water system insulation
* floor insulation.
Visit HMRC.gov.uk website for further details or by phoning 0845 9000 444.
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