Finance -
EPCs Required For Rental Property
Karl Hopkins
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By Karl Hopkins
Published on 10/10/2008
Energy Performance Certificates should now be added to the documentation landlords are required to provide tenants.

Energy Performance Certificates are now required for buy to let investors offering property to let are now required by law to provide prospective tenants with an EPC for their property.

The certificates have to be provided freely, either when (or before) any written information about the property is provided to prospective tenants or a viewing is carried out. They won't have to be provided if the landlord thinks the prospective tenant is unlikely to have available funds to let the property or is not genuinely interested.

A new EPC will not be required on each let since, in the case of buy to let property, EPCs will be valid for ten years.

The requirement is being introduced to comply with the EU's Energy Performance of Buildings Directive (EPBD) which applies to all property, including rental lettnigs. This became law in 2003 and allowed until January 2009 for full implementation so as to provide sufficient time for numbers of energy assessors to be trained.

The Directive's requirements have been introduced into English and Welsh law along with the controversial HIP regulations that order sellers to produce packs providing information about their title, local searches, plus an EPC. The full requirements are included in the Home Information Pack (No 2) Regulations 2007 and the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007.

In Scotland, the Single Survey, the equivalent to Home Information Packs, also includes an energy report requirement.

So far as energy performance is concerned, the regulations order an EPC when a building is constructed, sold or rented. When included in a HIP related to a property sale, the EPC should be no more than twelve months old when the property is first marketed. In other circumstances EPCs have a ten year life span.

In Scotland EPCs for buy to let properties module be required by January 2009.

By 2009, all buildings in the UK that are constructed, sold or rented out will have to have an EPC. In the case of larger public buildings a 'Display Energy Certificate' will have to be on show.

There are a number of different permitted assessment methods, their use depending upon the type of building being assessed. Dwellings will usually be assessed using the 'Reduced Data Standard Assessment Procedure' (RdSAP), an industry agreed accepted that allows some data to be inferred.

Its use involves inspectors collecting accepted information on the type of property and construction, the property dimensions including room sizes, types of windows, water heating systems and controls, and other details including loft, wall and water tank insulation. Agreed reference co-efficients are then applied to arrive at an energy rating.

EPC's for dwellings will rate the energy performance of buildings (not the appliances within them) on a scale of 'A' to 'G' - where 'A' is the most efficient, and 'G' the least. This module be displayed graphically in a similar way as present forcefulness labelling goods such as fridges and wasking machines.

Two ratings will be shown: an overall energy efficiency rating, and an environmental impact rating in terms of carbon dioxide emissions - the greater the rating, the lesser the impact on our environment.

The idea is that because Energy Performance Certificate's will be prepared using accepted methods with accepted assumptions, it will be possible to make comparisons of the energy efficiency of buildings. The Government argues that in the case of rental properties, high rating module be more desirable and will have most effect on the marketability of properties - and hence ultimately on rental income.