PRS Regulations Consultation – Domestic & Non-Domestic
Webinar Questions and Answers – 20 August 2014
Suman Lal-Sarbatta: What are leased non-dwellings?
Anything that is not defined as a dwelling in the Energy Performance of Buildings Directive (EPBD). Anything that is not a dwelling is in scope unless under license.
Keith Bugden: Landlord is responsible. How is Landlord defined?
We can define landlord within the secondary legislation. A landlord-tenant relationship does not have to involve a written contract but involves payment of rent.
Nigel Banks: Could landlords get an exemption on the basis that tenants refuse Green Deal Finance?
No, the landlord must still explore all possible routes of finance for energy efficiency measures, not just the green deal. A landlord will only be able to use the Green Deal Finance where the tenant gives consent.
Ian Byrne: Are there plans for after 5 years?
Exemptions would last for five years unless the exemption is due to the tenant not giving consent. In this case the exemption will only last until the tenant leaves the property. When an exemption expires, the property would then have to be reassessed to see if an exemption applies otherwise the minimum standard would have to be met.
Suman Lal-Sarbatta: Would a landlord need to obtain a new EPC certificate each time the rating is reviewed?
No, but the landlord may wish to if the property is now up to a rating of E or above.
Richard Chubb: Would the landlord/owner be responsible, letting agent or if a subleased property, please clarify
In every case the landlord is responsible for complying with the minimum standard regulations. If a tenant becomes a landlord in their own right, they are then also responsible.
Suman Lal-Sarbatta: If the tenant refuses, should the landlord get this in writing from the tenant?
The landlord should obtain the lack of consent in writing because if the property is below an E they will need to provide evidence that they had tried to obtain consent.
Isaac Occhipinti: What will happen if the Green Deal Scheme is cancelled or severely altered?
We would consider how both sets of regulations are future-proofed regarding the finance mechanisms. The secondary legislation provides options for alternative finance mechanisms.
Matthew O'Connell: If the landlord wishes to improve the energy efficiency of common parts of a leasehold block would they need consent from all tenants in the block?
This is true in principle but not all energy efficiency measures in common areas will affect every tenant. Consent will be required from those tenants affected.
Rachel Crosby: Can more than one exemption be applied for after expiry?
In principle, a landlord could have all three exemptions in place at the same time but they would all expire at the same time. There is no advantage in having more than one exemption at any one time.
Nigel Banks: Does the landlord have any time window to deliver measures or do they have to be done and brought up to EPC E before the new tenant moves in?
From 2018 the minimum standard will have to be met before the property is let. Landlords do have the option to raise the standards of their property at any time before 2018.
Richard Chubb: If the leaseholder is the same as the free holder, and freeholder refuses, but same entity, what would happen?
This would be one and the same person and it sounds as though they are in contempt of the regulations.
Kate Garth: If there is no Green Deal finance available for nondomestic properties, is DECC considering alternative financing options?
We have the powers to introduce an alternative finance mechanism and we are consulting on a payback mechanism. We have also looked at the Scotland Climate Change Act regarding payback on measures over 7 years, and the Building Regulations which is paid back over 15 years for all costs.
Richard Chubb: Are you concerned of the effect of Landlords selling and leaving the market due to these regulations? Has a full impact assessment been done on this?
Measures only have to be installed where it is cost effective to do so therefore there will be no upfront costs to the landlord. Energy efficiency improvements should add to the value of the property.
A consultation impact assessment has been done which is on the gov.uk website and a full impact assessment will be undertaken for the consultation response.
Richard Chubb: No impact except when not void, when void Landlord pays electric and green deal contribution
Whilst this is true, average void periods are very short and, in addition, academic research has indicated that a property value will increase through the installation of energy efficiency measures which will be a gain to the landlord.
Ian Byrne: Payback depends quite largely on occupancy, so a community hall type building that may only be used a few days/evenings a week may be much less cost-effective. Will there be any rules around this?
This has been built into the mechanism through the occupancy assessment which is part of the Green Deal Assessment.
Rachel Crosby: Does this not allow for unscrupulous landlords to pressurise tenants into signing, and therefore remaining permanently exempt?
This could happen but, in practice, if the tenant moves out the landlord will have to improve the property anyway under the regulations. Also lenders are now showing greater interest in the EPC of properties.
Richard Chubb: Has the impact on already cash strapped councils of enforcing these regulations been considered. Some contribution towards enforcement would be appreciated I’m sure you’ll appreciate. Trading standards departments have seen this area of EPCs as low priority generally, thus it’s pushed towards EH depts that are often being cut. Perhaps let Councils keep fines?
The government has committed to providing funding to LAs for enforcement. We are considering whether LAs should/could keep the fines and what different tools are available to support enforcement.
James Lloyd: What happens if it can be demonstrated that the EPC measurement is inaccurate for the real thermal performance of the building and concerns that the measures do not deliver the energy saving that the standardised assessment say they do i.e. the performance gap which we are seeing on many older homes is this covered in the impact assessment?
Suman Lal-Sarbatta: The hard start would help simplify and streamline the process.
Suman Lal-Sarbatta: Hard start means existing tenants are not disadvantaged.
James Lloyd: Thanks
Richard Chubb: James has a very good point. Houses with disrepair often appear better than the true EPC due to excessive ventilation etc. Some EPCs are done by phone. What enforcement against malpractice can be undertaken?
The Green Deal Code of Practice and the Assessor Specification address the issue of installing measures in specific buildings and address the requirement for specialists to be brought in in these cases.
Issues regarding a Green Deal Assessment or EPC are to be referred to the Assessor of certification body, depending on the circumstances.
A hard start would simplify this process though there may be an increased concern about tenants being evicted. There is also likely to be pressure on the supply chain to deliver in these circumstances.
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Andres Guzman: Are there plans to review the EPC calculation methodology before 2018?
There are three year reviews of SAP, the underlying methodology used for EPCs, but these do not change the underlying physics behind the calculations.
Ian Byrne: If these are applied where there is a sitting tenant, could the landlord use it as a way of evicting a sitting tenant, and if so will there be any protection of (domestic) tenants' rights?
It is hard to see how this would happen as, if the tenant refuses consent, the landlord is exempt from the regulations, therefore there is no reason for eviction. DCLG are producing more guidance around retaliatory evictions.
Matthew O'Connell: Local Authorities currently have to pay a significant fee to access landmark data on EPCs on anything more than a property by property basis. What plans do DECC have to remove this barrier to aiding enforcement?
Some LAs have purchased access to the register but we are aware that this can be expensive. The potential use of the tenant deposit register for enforcement of the regulations is also being considered. These mechanisms will not be part of the proposed regulations but we are interested in them working well as they may assist LAs in enforcing the regulations.
Kate Garth: How will the min energy efficiency standards enforcement work if the property is found to have category 1 hazard (which would take precedence in terms of ensuring improvement and does cost exemption issue come into this?
HHSRS (Housing Health and Safety Rating System) is proposed to have primacy over PRS regulations and the cost of these improvements under HHSRS falls to the landlord.
Suman Lal-Sarbatta: How could a local authority access tenancy deposit database?
We are currently exploring the rules around this with the DCLG.
Richard Chubb: Will it apply to Park Homes? Are there plans to include as these are the lowest performing units locally- off gas/ LPG/ High cost low income etc?
Richard – they are not dwellings.
Marcia – then we cannot currently include them but we will look at this issue.
Richard Chubb: OK they aren’t dwellings, but can they be included pleaseSuman Lal-Sarbatta: Caravan is not a dwelling under HHSRS.
Richard Chubb:You have the power!!! come on!
Richard Chubb:LOL
We will need to check this properties against the EPBD definition of dwelling as this is used in the PRS regulations. Properties in scope are also dependant on the nature of tenancy the tenant is renting under. We will look further into this issue.
James Lloyd: Can we have a more open debate about issues with SAP and sustainability before setting a trajectory?
Richard – UKGBC believes this is essential, especially to encourage early take up of improvements.
We are aware that there are many large portfolio owners and they need some certainty on a future trajectory.
We would welcome any options, concerns or ideas you have on this to be included in consultation responses.
Nigel Banks: The Fuel Poverty strategy has targets for 2025 and 2030 for all homes - will this drive future targets?
There is a need for alignment with fuel poverty targets which currently seek a D in 2025 and C in 2030.
Kate Garth: Agree - trajectory is essential may help to ensure cost effective measures done at most appropriate times, providing more certainty and likely future payback consideration. Agree that for domestic, the MEPS need to align with fuel poverty interim targets and 2030 target.
As above
Daisy Cross: Timelines should fit in with DECC's work on demand side response and smart/advanced metering.
DECC does look to ensure that the regulations complement/are aligned to its other policies.
Nigel Banks: Are there any plans for different/accelerated longer term targets/standards for social housing landlords?
Social housing has previously been targeted by the Decent Homes standard. The regulations target the PRS as this sector currently has the highest proportion of poor performing energy efficient properties. Social housing is outside the scope of these regulations.
Suman Lal-Sarbatta: Would you consider providing 2 tier guidance? eg. with the Rating System there is an Operating Guidance and there is also Guidance for Property related professionals. Bespoke guidance is a good idea.
Thanks for this suggestion. In due course we will be considering appropriate guidance and welcome suggestions on our approach.
Ian Byrne: SAP isn't the only methodology with problems; SBEM is also an imperfect tool - so could real measured energy use from (say) DECs be used if available as an alternative, subject to certain safeguards on occupancy periods.
Whilst we understand the limitations, it does provide a good benchmark and these methodologies are being consistently reviewed and updated.
Matthew O'Connell: If we are trying to tackle carbon emissions in the built environment surely the owner occupied sector has to play a part, there is a danger of a two tier domestic market being created. Any regulations for the PRS should be reflected in the owner occupied sector, especially as they have the same average SAP score.
These regulations are targeting the private rental sector and the higher proportion of energy inefficient properties in this sector. In order to achieve longer term carbon targets other sectors will need to be considered.
Suman Lal-Sarbatta: I am running a Landlords Forum at West Oxfordshire DC, and would love to have this as one of the topics. Are you available to present at my forum, or could you recommend speakers please? Many thanks.
We will contact by email to pursue this welcome offer. If anyone else wishes further contact please let us know.
Richard Chubb: Hopefully it will push the worst LL's into selling up thus equalising the housing market in favour of the young renters currently. Carbon important also.
Richard Chubb: Could it be extended to sale of property, then are there plans for this? Seems biased against LL's currently when so many are in the owner occ sector- maybe provide interest free green deals,