Energy Efficiency Improvements

Occupier's Energy Efficiency Improvements

An occupier 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, utilising funding provided by the central Government, a local authority or any other person,
• can be wholly funded by the occupier, 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. However, 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 service of the 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" which 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.

You can apply to the Residential Property Tribunal Wales to determine any disputes that may arise.

Minimum Level of Energy Efficiency

From 1 April 2018, all rented property to be let on assured shorthold tenancies, regulated tenancies under the Rent Act 1977 and four types of agricultural tenancy must have an EPC rating of at least "E".

This requirement also applies to renewal tenancies to the same tenant for the same property on or after 1 April 2018. The duty is also triggered by "an extension".

From 1 April 2020, all domestic properties (including existing tenancies) of the types listed above must have the minimum E rating. 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 occupier refuses consent (exemption ends when the occupier refusing access leaves the property)
• the landlord is unable to obtain consent from a third party such as a freeholder
• 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 not meeting the minimum standard, the agreement remains valid between the landlord and occupier, 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 Exemptions Register can be found here.

Green Deal

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 over the life expectancy of that improvement. This effectively means the upgrades are free of charge, and once paid for, the savings would begin. Other factors to be considered under the golden rule include the expected life of any energy efficiency improvement made.

For more information and to find a Green Deal provider, please see here.

Energy Improvement Grants

Some 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:

• Pension Credit
• Child Tax Credit
• Working Tax Credit
• Income Support
• income-based Jobseeker's Allowance
• income-related Employment and Support Allowance
• Universal Credit

There are some extra conditions, including certain limits on the amount of income received and other benefits paid in certain circumstances.

More information about applying is available here.

From time to time, Government, private organisations or local authorities provide other grants or incentives. See here for more information.