Introduction
EPC certificates can cost landlords money and sometimes seem unnecessary yet they’re a key piece of safety that all landlords must adhere to. There are also different types of certificates for residential properties and commercial properties and each certificate is given a rating that tells tenants how efficient energy is being used.
Read on for the details on how to get an EPC certificate because all in all, it is clear knowing about EPC certificates in detail is necessary as a landlord to know how to conduct your property business in the right way and ensure the safety of your tenants.
What are Energy Performance Certificates?
Energy performance certificates are tokens of accreditation given to properties that pass an energy performance rating based on energy efficiency.
Data the certificate uses is the energy used per metre squared of the building coupled with what the carbon emissions are likely to be. This gives a good indication of what a property owner can do to improve the cost-effectiveness of the premises.
EPC ratings explained
It is easy to think of an EPC rating as simply just a rating of how much energy is used in the property but in fact, the rating is a lot more complicated. EPC ratings relate to the energy efficiency of the building. This means taking into consideration the energy wasted on the premises and how this relates to the overall energy cost.
They also tell you how much money would likely need to be spent to heat and light a property. If this is too expensive and the EPC rating is failing, the landlord could be asked to conduct improvements so tenants don’t have to pay so much in bills.
As well as this, an EPC will tell tenants and landlords what their carbon footprint is like which is a good metric to have if they care about offsetting these emissions. Important in protecting the world against climate change and regulating the UK’s net carbon footprint
How to improve your building’s energy efficiency
There are a variety of ways to improve a building’s energy efficiency and this is becoming more important after new regulations in 2020 with some of the most common ways to reduce the amount of heat lost in the property through installing insulation like triple-glazed windows or insulation in the walls.
A landlord can also make amendments to the equipment in a property. For example, installing energy-efficient light bulbs like LEDs or making sure the boiler doesn’t waste heat because of blocked pipes or being outdated. One of the more modern ways is to install a smart meter which will heat a property efficiently at the right times of the day.
Domestic EPC certificates
Domestic EPC certificates must meet the minimum requirement for domestic properties. These requirements are laid out within a standard called the Domestic Minimum Energy Efficiency Standard (MEES).
This means every residential property being rented out by a landlord must have one to protect tenants. The certificate should contain the property address and description, the date of the assessment and certificate as well as the total floor area of the property.
The reason for a domestic property having its own classified certificate is because they have a slightly different standard to commercial properties seen below. For more on these domestic standards, have a look at the government website here.
Non-domestic (commercial) EPC certificate
In order for a property to be classified within the non-domestic category of EPC certificates, the property must have a floor area greater than 50 metres squared. The property must also contain fixed services that aren’t able to be moved around within the interior of the premises.
The properties that meet these requirements are carefully registered by the Department for Levelling Up, Housing and Communities (DLUHC) and the properties are grouped into categories based on the complexity of their interior.
All commercial or non-domestic properties must have a valid EPC certificate when the property is bought, rented or sold to make sure they comply with the law. In addition to this, the certificate must be displayed showing the full energy use of the building somewhere within the premises.
What information should be included in an EPC certificate?
A qualified energy assessor will produce all the requirements needed in an EPC certificate. The list is quite extensive but may contain:
- Property address and details
- Date of assessment and date the certificate was awarded
- The certificate’s reference number
- The type of energy assessment
- The energy efficiency now and with improvements
- Estimated energy costs now and with improvements
- The total floor area of the property
- The energy performance of individual equipment and structure
- Advice to make the property more efficient
- The energy assessor’s professional details and contact details
- The environmental impact of the property
An EPC assessor will usually include all of the above but they can also give you more information than is if asked for. On top of this, simply asking your assessor for any advice would be a great way to move forward. Especially if you don’t understand some of the terms in the document.
How long does an EPC last?
An EPC certificate is valid for quite a long time at 10 years. However, as a result of the time frame being so long, it is common for landlords to forget the certificate needs renewing. This is where having good property management software to remind you every decade comes in handy.
Can you sell a property without an EPC certificate?
It is a requirement to sell a property with a valid EPC certificate. This is due to the government wanting to give tenants the option to see the energy rating of a property before they move in or the work that needs to be done by the new buyer before they purchase it.
However, if there are no occupiers in the property and you are waiting to decide what to do whether that be to sell or rent the premises, it is legal to have no EPC certificate or a failing EPC certificate while you are in the middle of this process.
Why get an EPC?
If you are a landlord looking to rent a property to potential tenants, there is a requirement to present your certificate with the energy performance of your property so they can see what the potential costs for heating and lighting their home would be.
As well as this, there is an increasing interest for tenants and members of the public in general to only live in properties that are environmentally friendly and do not release too much greenhouse gas.
Why are EPCs so important?
A tenant will be able to see all the information from an EPC certificate prior to moving in and make a decision based on their standard. Even if a tenant isn’t obliged to pay their bills as this is covered by the landlord, if there is poor energy efficiency in the building, the price of rent is likely to be above average to offset this additional cost of operating the property.
This is why as a landlord it is important to think in the minds of your tenants when renting out a property. It is common for tenants to pick one household over another simply because of a higher EPC rating.
This information is also available to the public without you having to display it physically in a certificate by searching for it on the public database of EPC certificates here. Once you sort by postcode a tenant will be able to see the energy ratings in the area and choose a property that meets their needs better than others.
This gives a further incentive for landlords to increase the score of their EPC certificate because even if the certificate is passing and not that bad, they may struggle to find tenants as a result of their EPC certificate being below average for the area.
What are the benefits of getting an Energy Performance Certificate?
Benefits of getting an EPC certificate include being able to provide a sense of accreditation to potential tenants, and helping you find tenants. As well as this, you will be able to produce less greenhouse gas from a property, helping the environment.
Finally, getting improvements done to get a good EPC rating can be a good financial investment, making your property more energy efficient in the long term which will save you money on light and energy bills. This makes a property more appealing to investors and can help add value to the property when it is sold.
In fact, some mortgage lenders will only lend money if the rating of the property is above a certain standard. As a result, you may be able to qualify for a better mortgage if you can push an EPC rating up into a new category.
What the Energy Performance Certificate does not include
An energy performance certificate doesn’t tell you anything about the amount of energy used in the construction of the property. So, even if your property is extremely energy efficient, the property could have released a lot of carbon emissions beforehand which may offset any benefit from the energy efficiency of the build.
Having said this, the government is trying to bring regulations like this into fruition by implementing the standard of the future homes which sets out to have all homes being produced with 75% – 80% fewer carbon emissions by 2025 compared to now.
EPC checks do not show the gas safety in a property nor the electricity safety either, refer to checks like the CP12 certificate and an EICR checks to get a property checked for those safety measures.
Finally, there are some things that may not be able to be picked up by an EPC assessment and in these cases, the assessor will make a prediction or estimate. As an example, the property may or may not have underfloor insulation in the building but the assessor will make a reasonable judgement on whether this is the case.
Predictions are made in this way when it is not possible to find the relevant information without damaging the property like lifting up the floorboards to find insulation.
What happens if you do not have a valid Energy Performance Certificate?
If there is no valid EPC certificate, the property cannot be bought, sold or rented. However, sometimes there can be tenants in a property and the EPC certificate has expired.
In these cases, a tenant can report a landlord to the local authority which could result in them not being able to evict the tenant under section 21 as they are not complying with their end of the tenancy agreement.
The local authority could issue the landlord with a fine too which carries a minimum penalty of £500 and a maximum of £5000. Most of the time, this fine will be 12.5% of the property’s annual rental income. For example, if a property does £20,000 in rental income throughout the year, the fine would come up to £2,500.
How much does an EPC Certificate cost?
The costs associated with EPC certificates are not that expensive but when improvements are factored in, costs can add up. In addition, the government plans to add more regulations in the future which will move the passing score on an EPC certificate from an E to a C for new tenancies by 2025.
If this regulation comes into play, there is a predicted cost for improvements on properties to be up to £8,500 on average. Houses that have poor energy efficiency like Victorian houses need the most improvement and could potentially pay the most.
How much does an EPC Certificate cost?
Getting a check done will cost the property manager or landlord of the property £60 – £100. This cost is negligible given the certificate only has to be issued every 10 years. However, if the EPC is a failure (scores E or below), you will need to spend more money on the property in order to conduct improvements which can be as expensive as £3,500
How do I know if I already have an EPC?
If you are not sure if your home has a valid EPC certificate and you want to find out, you can check on the government website here and search for your postcode.
If you have not bought, sold or rented a property since the 1st of October 2008, chances are you will not have an EPC certificate as you wouldn’t have required one.
However, getting a surveyor to conduct an assessment can be done at any time if you are curious about the energy efficiency of a property.
As a landlord or a homeowner, do I need an Energy Performance Certificate?
There are a few premises that will be excluded from having an EPC certificate. This includes:
- residential properties that operate for less than four months of the year
- Temporary buildings (buildings in place for less than 28 days)
- Places of worship like mosques and churches
- Industrial site
- Holiday lets
- Buildings that are category A or B listed with historical interest.
Otherwise, if you’re a homeowner who wants to buy, rent or sell a property, obtaining an EPC certificate will be a requirement. If you have no intention of doing the above, you won’t need an energy performance certificate for any legal reason.
Nonetheless, it may be a good idea to stay up to date with basic regulations like fuse box regulations to maintain a safe home.
When is an Energy Performance Certificate required?
EPC certificates are required to buy a property if you are a buyer and are looking to buy, a seller looking to market a property or a landlord using the property to rent, you will need a valid EPC certificate. This has been a requirement since 2008.
Step by Step Process Of Obtaining an EPC
The process of obtaining an EPC certificate is unfamiliar to a lot of landlords because of how infrequently you need to conduct the assessment. Read on to familiarise yourself with the process.
Determine if you are need for an EPC Certificate
To determine whether you need an assessment done, the first thing you should do is find out if your building is excluded from needing one in the first place. Next, if you are eligible for a certificate, check on the government website if you already have an EPC certificate and if it is valid.
If you have gone through these steps and you find you don’t have a valid EPC certificate and you need one, go to the next step to find an EPC assessor.
1: Find EPC Assessors
Finding an assessor who can conduct your EPC assessment and produce a certificate is made very simple by the government. To find an assessor who is accredited by the government click here for a list of energy performance assessors who are within your area.
Alternatively, you may choose to search online or find someone you know who can conduct the assessment. Be sure to find out if they have completed the relevant qualifications to become an accredited energy assessor beforehand.
2: Obtain an EPC Price Quote
Next, ask for a price from your energy assessor. They will take into consideration the size and scope of a property. This may include taking into consideration the area of the floor space in the property or whether it is located in an affluent area.
3: Make an Appointment with the EPC Assessor
Following agreeing on a price, you will be able to make an appointment with the assessor on a date when you are available to let them into the poetry and provide basic information to them.
In order to conduct the assessment they may need basic information from you like where the boiler is located inside the property.
4: Wait for the EPC Certificate
Depending on the company you use, the certificate may take anywhere from a few days to up to a week to get delivered. Typically, you can provide the company with an address to be delivered to but they will also likely send the certificate in digital format.
5: Find the EPC Online
Because the EPC assessor will be registered with the government when they conduct an EPC assessment, they will be able to register the property straight away with the energy certificate service so anyone can search for it and find it online.
And that is it, you will now have an EPC assessment carried out and hopefully the certificate passes in order for a landlord to buy, rent or sell their property.
Who produces energy reports and EPCs?
Energy assessors conduct EPC certificates and they always must be registered as qualified by government bodies. The process of doing an EPC check differs slightly throughout the UK.
England, Wales and Northern Ireland
In England, Scotland and Northern Ireland, EPC ratings are calculated using a combination of the building emission rate and the standard emission rate and given a scale from A which is the best rating to G, the worst.
Scotland
In Scotland, instead of having to comply with the Minimum Energy Efficiency Standard (MEES), the property owner has to comply with section 63 of the climate change act of Scotland 2009.
As a result, the EPC ratings in Scotland look slightly different compared to those used in England, Wales and Northern Ireland. The scale is instead a number scale and is calculated using just the building emission rate.
In conclusion
To conclude, there is a clear need for conducting a valid EPC check as it is a great way to see the energy efficiency of a property and find places to add value.
Adding to this, there is a clear need to understand the type of EPC certificate you’ll need to conduct as a landlord because there is a range of different regulations based on where you are in the UK and what type of property you have.
Especially when there are so many tests that are required for landlords like a landlord electrical safety certificate or gas safety certificates to keep up with all the new rules.
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