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Landlords Guide to Energy Performance Certificates (EPC's) on Rental Property
Energy Performance Certificates (EPC)
Landlords that thought they had seen the last of any more ludicrous legislation from this Government affecting their buy-to-let investment properties will be sadly disappointed. The latest crazy bit of paperwork dreamt up by the bureaucrats in Whitehall coming via a European directive from their counterparts in Brussels is the Energy Performance Certificate (EPC). These bits of useless paper are a spin off from the governments much maligned HIPs or Home Information Packs (some readers who have tried to sell their property will be aware of the arrival of these documents, which rather than making the process of buying and selling residential property easier as intended, have just been another drag on an already slowing residential property market.)
What are Energy Performance Certificates?
These certificates are for all buildings and will be required whenever a building is constructed, rented or sold. The Energy Performance Certificate (EPC) is broadly similar to the labels now provided with domestic appliances such as refrigerators and washing machines. Its’ purpose is to record how energy efficient a property is as a building. The certificate will provide 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 idea is that EPCs because they are produced using standard methods with standard assumptions about energy usage so that the energy efficiency of one building can easily be compared with another building of the same type. This in theory will allow prospective buyers, tenants, owners, occupiers and purchasers to see information on the energy efficiency and carbon emissions from their building so they can consider energy efficiency and fuel costs as part of their investment.
An EPC is always accompanied by a recommendation report that lists cost effective and other measures (such as low and zero carbon generating systems) to improve the energy rating of the building. The certificate is also accompanied by information about the rating that could be achieved if all the recommendations were implemented. What do Energy Performance Certificates contain?
The EPC contains a mixture of information about the energy efficiency of a landlord’s residential investment property which is listed below the following headings: Reference information
This includes the type of property (e.g. house, flat), the unique reference number (as stored in the central register) and date of the certificate. Estimated energy use
This is based on standardised assumptions about occupancy and heating patterns. An estimate of the current and potential energy use, carbon emissions and fuel costs for lighting, heating and hot water is provided. The actual energy use depends on the behaviour of the occupants. Energy Assessor details
This includes the assessor's name, accreditation number, company name (or trading name if self employed) and contact details. Complaints
The certificate will provide information about how to complain or how to check the certificate is authentic. Energy advice
The certificate provides basic advice about energy efficient behaviour. Recommendation report
The certificate is accompanied by a report which includes recommendations to improve the energy ratings. Recommendations include cost effective improvements and further improvements (that achieve higher standards but are not necessarily cost effective). For each improvement the level of cost, typical cost savings per year and the performance rating after improvement are listed. The potential rating shown on the certificate is based on all the cost effective recommendations being implemented
When is an EPC needed?
An Energy Performance Certificate is required when a building is constructed, sold or rented out. An EPC is valid for 10 years, except for sales of homes which are subject to the Home Information Pack Regulations 2007, where a Home Information Pack (HIP) is required. In these cases an EPC must be no more than 12 months old when the property is first marketed. A landlord is responsible for ensuring that a valid EPC for their buy-to-let residential investment property is available to all prospective tenants from the 1st October 2008.
The EPC and recommendation report must be made available free of charge by a landlord to a prospective 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)
Where do I get one & what happens if I don’t have one?
A Landlord can only obtain an EPC from a licensed Domestic Energy Assessor (DEA). Because of the recent introduction of this legislation there were initial concerns that there could have been a shortage of DEA, but as yet this has not materialised. However, landlords are advised to not wait to the last minute before the 1st October deadline. Expect to pay between £65-100 for one. Landlords or letting agents that don’t have a valid EPC risk being reported to the Local Trading Standards and also the Office of Fair Trading. Penalties include fines of up to £5000 and loss of the right to operate.
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Contributor's Note
This is an article from the landlords magazine section of the Property Hawk site.
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The copyright for this content entitled "Landlords Guide to Energy Performance Certificates (EPC's) on Rental Property" has been specified by the contributor as:
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