EPC Requirement for HMO and Section 21 Notice

For an assured shorthold tenancy in England granted or renewed since 1 October 2015, it is a requirement to serve a section 21 notice; specific prescribed requirements must have been complied with. 

The prescribed requirements include an Energy Performance Certificate (EPC) and a gas safety record.

However, what is the position where the property being let is just a bedroom? Does an EPC need to be given before a section 21 is served, and is an EPC even required in such an HMO-type property?

Before we go on, and despite what else is said in this post, we always recommend that in the case of letting a room only in a house, the landlord should ALWAYS obtain an EPC for the whole house and give it to the prospective tenants (and actual tenant) of each room. 

An EPC costs between £50 and £80 and lasts for ten years, so it’s not a great expense (as long as it has a rating of “E” or above)! 

By giving all tenants of each room the EPC, the question above doesn’t matter - they’ve had an EPC, and that’s that.

In the Home Group Ltd v Henry, County Court at Newcastle, 21 May 2018, these questions were asked (thanks to NearlyLegal for reporting). This is only County Court, so not binding.

Background

An assured shorthold tenancy was granted to Mr H. The dwelling was described as a “single bedroom with en suite together with shared use of the following communal facilities: kitchen, lounge and shower room”.

In September 2017, a section 21 notice was served by the landlord, and the tenant defended the subsequent possession proceedings because no EPC had been provided.

In the first instance, a possession order was granted to the landlord, so the tenant appealed.

Appeal Arguments

On appeal, the tenant argued that regulation 2(1)(a) of The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 did not refer to whether an EPC was “required” or not; it simply says that the following is a “prescribed requirement”:

regulation 6(5) of the Energy Performance of Buildings (England and Wales) Regulations 2012(2) (requirement to provide an energy performance certificate to a tenant or buyer free of charge)

Regulation 6(5) of the EPC regulations states:

The relevant person must ensure that a valid energy performance certificate has been given free of charge to the person who ultimately becomes the buyer or tenant.

Again, there’s no mention of “if required”, just that an EPC has to be given.

In addition, the tenant pointed out that the notes on the new form 6A (new prescribed section 21 notice) state that an EPC must be given and makes no reference to being “if required”.

The landlord argued that the reference in the prescribed requirements to the EPC regulations should consider the whole of those EPC regulations and, therefore, only a prescribed requirement if an EPC is required.

Under the regulations, an EPC is only required for a “building”, and a building is defined as:

“building” means a roofed construction having walls, for which energy is used to condition the indoor climate;” and “building unit” means a section, floor or apartment within a building which is designed or altered to be used separately;”

The landlord argued that as a room in a house is not “designed or altered to be used separately”, it’s not a “building”, and as such, no EPC is required.

This is confirmed by the DCLG guidance Energy Performance Certificates for the marketing, sale and let of dwellings (December 2017) which states (on page 7):

An EPC is not required for an individual room when rented out, as it is not a building or a building unit designed or altered for separate use. The whole building will require an EPC if sold or rented out.

Decision

The tenant's appeal was dismissed, and the possession order stood. HHJ Kramer held:

The 2015 AST Regs did not, in themselves, impose new obligations but referred to obligations in other regulations. So, if the obligation under Reg 6(5) only arose in the situations set out in the rest of the Energy Regs, that was also the only point it was an obligation for the AST Regs 2015.

While no derogation was expressly made in the 2015 AST regs for HMO tenancies, this would have required a new definition of EPCs to be relevant to a room, not a building or building unit.

The explanatory note to the form 6A was not in itself the law, and the notes here were misleading.

(Source: NearlyLegal as linked earlier)

Comment

As mentioned earlier, this is County Court, so not binding. Furthermore, and to repeat, we strongly recommend that an EPC is always obtained for the whole house and then given to the tenant of each room (and prospective tenants during or before viewings).

That said, this decision is as we understood it and read the regulations, and it’s only a prescribed requirement if an EPC is required in the first place. The rules are not imposing new duties, just ensuring existing obligations are being complied with before section 21 can be served.