The Department for Business, Energy and Industrial Strategy (BEIS) announced that they plan to amend the regulations requiring landlords to install energy efficiency measures to domestic homes.
Since April this year (2018), landlords who own privately rented homes have been required to improve these properties with energy efficiency measures where support is available to cover the costs. There has been much confusion over these new rules as they included the words "where support is available to cover the costs". This was sometimes phrased as "at no cost to the landlord". This meant if there was no finding available from either green deal or local govenment then a landlord could apply for an exemption.
With many local councils strapped for cash there has been little finding available. So out of fear of breaching rules many landlords have been making the improvements at their own expence. Others have simply taken advandage of the exemptions register by exempting their properties.
The new measures announced today are set to clarify the situation by announcing after a public consultation, that a landlords contribution with a cost cap will be introduced.
The Government have concluded that the cap will be set at £3,500 (inc of VAT).
Our accreditation company Elmhurst has quickly reviewed the papers and the following is a summary of the detail:
1. Introduce a landlord financial contribution amendment with the landlord contribution capped at £3,500 and inclusive of VAT;
2. Any investment in energy efficiency made since October 2017 to be counted within the cap;
3. Any available third-party funding, including Green Deal finance and local authority grant funding, to be counted within the cap;
4. Establish a new ‘high cost’ exemption to be available where a substandard property cannot be improved to E for £3,500 or less, and require the submission of three installer quotes where a landlord is registering such a ‘high cost’ exemption;
5. Remove the current ‘no cost to the landlord’ provision, and curtail existing ‘no cost’ exemptions so that they will end on a planned date of April 2020;
6. Remove the consent exemption currently available under Regulation 31(1)(a)(ii) where a tenant has withheld consent to a Green Deal finance plan;
7. Upon enactment, the amended regulations will apply upon the granting of:
a new tenancy to a new tenant, and, a new tenancy to an existing tenant.
8. From 2020, the amended regulations will apply to all privately rented property in scope of the regulations, in line with the existing regulatory ‘backstop’ date.
It should be noted for privately rented homes in breach of the regulations, local authorities can use enforcement measures or issue a fine which is capped at £5,000. Local authorities also have powers to issue a publication penalty which would see the details of a landlord breach published on the PRS Exemptions Register.