EPCs and Listed buildings - an answer at last?
The issue of Listed Buildings and whether they are exempt from Energy Performance Certificate requirements has been around for a long time now.
The good news is DCLG – now the Ministry for Housing, Communities and Local Government – has updated its guidance in relation to Listed Buildings and those in Conservation Areas.
The bad news is the legislation is still unclear.
EPCs and Minimum Energy Efficiency Standards
The requirement to comply with Minimum Energy Efficiency Standards is linked to EPCs and will come into force from April.
As from that date on any new letting or renewal must have a minimum E rating under an EPC and as from 1st April 2020 this is extended to existing lets.
Exemptions
Some residential buildings are exempt from the requirement to have an EPC when they are rented out or sold – in which case the Minimum Energy Efficiency Standards do not apply.
The general understanding has been that listed buildings are exempt.
However, this question rests on the interpretation of the relevant EU Directive which the RLA believes is badly drafted and unclear.
It says that buildings protected as ‘part of the designated environment’ or because of their ‘special architectural or historical merit’ are exempt from the requirements to have an EPC “insofar as compliance with minimum energy performance requirements would unacceptably alter their character or appearance”.
This would apply even if an EPC was actually in place, because it would be treated as being obtained voluntarily; not as a requirement at the point of renting out or sale.
What the revised Government Guidance says is: “To comply with minimum energy performance requirements, many of the recommendations in an EPC Report, e.g. double glazing, new doors and windows, external wall insulation and external boiler flues, would likely result in unacceptable alterations in a majority of historic buildings.”
It suggests that if there is any doubt as to whether works would ‘unacceptably alter’ the character or appearance of a building, owners should take the advice of their local planning authority’s conservation officer.
However, there is still ambiguity.
Catch 22
This advice produces a “chicken and egg” situation.
Unless you have an EPC you will neither know whether the property meets the minimum E requirement or what the works are needed – vital information in order to be able to judge whether or not they are ‘unacceptable’.
The consequences
One of the requirements when a property is let is to provide an EPC when one is required. Otherwise, Section 21 cannot be relied on as the obligation has not been fulfilled.
The RLA is aware of at least one case where a tenant has challenged the validity of a Section 21 Notice on this basis and there could well be challenges in other cases.
If challenged there are also potentially significant penalties for not complying with the minimum E EPC rating obligation.
What to do next
The RLA itself is not able to offer legal advice because clearly the EU Directive is open to interpretation.
If need be you should take your own legal advice.
For landlords concerned about the potential risk, one option to consider when renting out property is to clarify with the local conservation officer what work recommended by an EPC is permissible and to carry out these works.
You would need to obtain an EPC in this situation.
You could then carry out the permitted works and register an exemption on the EPC register for other works which the conservation officer would not agree to.
However, until there is a clear court ruling there are no guarantees.
Richard Jones, RLA company secretary said: “We will continue to put pressure on the department for greater clarity in this area, however the problem we are facing can, realistically only be resolved post-Brexit, as EPC legislation is based on EU law.
For more information see the RLA’s updated guide on EPCs and Listed Building here.
More information
- The RLA is running two new classroom courses in Energy Efficiency Regulations and Practical Sustainability and Energy Efficiency this year, to keep landlords abreast of legislation in this area and give practical advice on what they need to do to comply. For further information about training click here.
- For general information about your obligations under the new MEES rules coming in next year click here.
- For further information on grant and finance available to fund energy efficiency improvements through the RLA’s energy partners see the RLA’s energy efficiency funding page.
