Energy Efficiency Improvements
Tenant's Energy Efficiency Improvements
A tenant is allowed to reasonably ask for a relevant energy efficiency improvement. A relevant improvement will only be reasonable if it–
- can be wholly financed, at no cost to the landlord, using funding provided by central Government, a local authority or any other person,
- can be entirely funded by the tenant, or
- can be financed by a combination of those two arrangements
A request must be in writing and may be given by post.
When a landlord receives a request, a landlord will only be able to refuse consent on limited grounds. But, because a request is only "relevant" if it is of no cost to the landlord, this shouldn't be too much of an issue. A landlord may fund improvements if they prefer.
A landlord needs to provide an "initial response" within one month of the tenant's request, and there are provisions available where consent is required from a superior landlord. It is possible for a landlord also to serve a "counter-proposal" that specifies an alternative (or multiple alternatives).
There will be a few exemptions from having to carry out improvements, such as if the works would reduce the property's market value by more than 5% or consent from a third party has been refused.
An application to the First-tier Tribunal can be made to determine any disputes that may arise.
Minimum Level of Energy Efficiency
From 1 April 2018, all rented property let on assured shorthold tenancies, regulated tenancies under the Rent Act 1977 and four types of agricultural tenancy, which is to have a new tenancy must have an EPC rating of at least "E".
This requirement also applies to renewal tenancies to (same tenant for the same property) on or after 1 April 2018. The duty is also triggered by "an extension" where heating or cooling services are extended into the extension.
From 1 April 2020, all domestic property (including existing tenancies) of the types listed above must have the minimum E rating where it is a lawful requirement to have an EPC (e.g. it is within ten years of its original commissioning). Non-domestic properties have until 1 April 2023 (including existing tenancies) to meet the E rating.
There are several exemptions for the minimum standard where-
- the property is unable to be brought up to the standard after £3,500 has been spent on recommended energy improvements
- the tenant refuses consent (exemption ends when the tenant refusing access leaves the property)
- the landlord is unable to obtain permission from a third party
- works required to bring the property up to the "E" level would devalue the property by more than 5% of the market value
Where a domestic property has been let, which doesn't meet the minimum standard, the tenancy remains valid between the landlord and tenant, but a fine will be payable by the landlord of up to £5,000. Penalties can be much more significant for non-domestic properties depending on their size.
The Department for Business, Energy & Industrial Strategy has published helpful guidance about the minimum energy requirements available here.
The Green Deal allows for energy efficiency improvements, and savings made by the energy improvements offset the cost of those improvements.
The Green Deal has a "golden rule" that any cost of improvement must not exceed the savings being made by the improvements. This effectively means the upgrades are free of charge, and once paid for, the savings would begin. There are other factors to be considered under the golden rule, such as the expected life of any energy efficiency improvement made.
Energy Improvement Grants
Several grants may be available for making energy improvements to a residential home.
The Affordable Warmth Obligation is probably the most familiar and is universally available. It is available on rented property and owner-occupied and may cover all or part of the cost of insulation or replacing a boiler. To be able to obtain the work, the occupier must be on one of the following benefits:
- Child Tax Credit
- Working Tax Credit
- Income Support
- income-based Jobseeker's Allowance
- income-related Employment and Support Allowance
- Universal Credit
There are several extra conditions, including certain limits on the amount of income received and other benefits are paid in certain circumstances.
From time to time, Government, private organisations or local authorities provide other grants or incentives. See here for more information.