A short series from landlord & tenant lawyer Tessa Shepperson on things you need to watch out for.
1 – Do you rent out property on an assured shorthold tenancy?
If you rent out property it will almost certainly be an AST. Even you think it is a license it may not be.
2 – Does your property need an Energy Performance Certificate?
Most rented properties do. The main exceptions being rooms in shared houses.
Was your answer to these two questions ‘yes’?
If so – if your EPC did not give your property a rating of E or above, you could be in trouble. As new rules are coming in on 1st April which will require an E rating or above for all new tenancies. Unless exceptions apply.
Dealing with the new rules
Double check your rating
The first thing to do is to check what rating you really have. If your property has an F rating and the EPC was done quite a few years ago, then it may be worth getting it done again.
You may find you have a different result as the methodologies underpinning the EPC calculations do change from time to time.
See if you can claim an exemption
If your rating is F or less, you then need to check whether you can get funding. You will only be required to upgrade your property if funding is available. If it is not available, then you will be able to claim an exemption.
Other situations where you may be able to claim an exemption include:
If you have done all the upgrades you can, and the property is still sub standard
If the works require a third-party consent (e.g. from your freeholder or from the tenant who may not allow you to enter to do the works) which consent has not been provided – and you have made reasonable efforts to obtain the consent
If the recommended works would devalue the property by more than 5%
NB This is not a complete list.
Note that you will need to have some sort of documentary proof to prove the exemption.
You will then need to register the exemption with the National PRS Exemptions Register, which will then protect you, in most cases, for five years.
This is a very brief overview. In all cases you need to check the government guidance which sets everything you need to know out in detail.
But be aware that you should either have done the upgrade work (or at least started it), or have registered a valid exemption by 1st April 2018.
Or you could get fined …
Tessa is a lawyer specialising in landlord & tenant law and runs the popular Landlord Law online service for landlords.