The Government has recently passed new minimum energy efficiency standards which come into force on 1 April 2016. These will affect both landlords of domestic and commercially privately rented property. The regulations have been introduced as part of the Government strategy to meet climate change targets and they will affect both domestic and commercial private rented property with an energy performance certificate below an “E” rating.
The ratings currently go from “A” (highest) to “G”. The Government estimates that this will affect around 18% of commercial premises.
What do the changes meaning to Landlords?
Landlords of both commercial and residential property will need to improve the energy efficiencies of their properties to raise them above the minimum “E” rating. As you might expect, there are also penalties for non-compliance.
Should the energy performance of the rented property fall below the minimum level of energy efficiency (i.e. below an “E”) a Landlord may not:-
- Grant a new tenancy or renew an existing tenancy after the 1 April 2018;
- Continue to let a domestic property after the 1 April 2020;
- Continue to let a non-domestic private rented property after the 1 April 2023.
What does this mean for Tenants?
Tenants and prospective tenants should be aware of any work that their Landlord may be planning to improve the energy efficiency, as this may cause them disruption, and they might end up paying for some of the work under the service charges or their obligations under the lease to repair the property.
Both landlord & tenants would be wise to check the terms of existing leases and consider carefully the drafting of new ones with these regulations in mind.
If you would like further information on how the regulations will impact on both commercial and residential Landlords, you can contact Rob Cooke.
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