Energy Efficiency – New Rights for Tenants

May 11, 2011 - PRLog -- Energy Performance Certificates (EPCs) are a legal requirement for the majority of rental properties, whenever the building is let to a new tenant. In its recent Green Deal proposals, however, the Department of Energy and Climate Change has proposed new powers to require landlords to honour ‘reasonable’ requests from their tenants for energy efficiency improvements.

In principle, it is intended that where financial support is available this should be mandatory – so there are no upfront costs to the landlord. The Department also intends enabling local authorities to insist landlords of the worst performing properties make all energy efficiency improvements for which there is financial support available.

A No-Cost Option?
While compliance with the proposals would appear not to impose a potential financial burden on property landlords, it is by no means certain that they will be promulgated in the format originally envisaged and regulation creep has a habit of transmuting good intentions into hard law.

It is therefore possible that any reduction in the grants available for energy efficiency improvements will necessarily result is less pressure on landlords to upgrade property in line with tenants’ requests.

Practical Implications
While in many cases, installing cavity insulation, for example, may not be very costly, similar treatment is far more expensive in homes with solid walls, because walls may have to be internally clad. In listed buildings this is unlikely to be possible at all.

There may be good reasons for landlords to consider action ahead of any change in the regulations, since better-insulated properties may be easier to let – especially if this is not the norm in the area – and it may be possible to secure higher rents from new tenants when this is done.

It is important to ensure that, if structural alterations are made to the property, the Landlord Insurance Company is advised; if the alterations are significant, there may be increased risk during the work period and afterwards the sum insured may need to be reviewed.

Who is most likely to be affected?
The primary focus for local authority action is intended to be those landlords with properties where the EPC rating is “F” or “G”, the two lowest ratings.

It is likely, however, that as the regulations come into force and people become more aware of them, requests from tenants will apply to better-insulated properties. While requests are intended to be ‘reasonable’, a degree of goodwill will probably be required on both sides, because tenants wishing to do so could probably make life difficult for landlords where a decision has to be made about what is, in fact, ‘reasonable.

The consultation period ended on 4th April 2011, so we should have more details soon, and the ability for tenants to request ‘reasonable’ energy efficiency improvements is expected to come into force from 2015.

Getting the right advice
It is important to seek independent professional advice before making any decision about your property owners’ property and liability insurance as well as your financial obligations. You should always ask your insurance advisers like Alan Boswell Insurance Brokers what experience they have of dealing with residential and/or commercial rental property insurance.

NOTHING CONTAINED IN THE ARTICLE SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE. PLEASE NOTE THAT THERE MAY BE VARIATIONS FOR THOSE LIVING IN OR LETTING PROPERTY LOCATED IN SCOTLAND AND NORTHERN IRELAND.

For more details visit: http://www.Alanboswell.com

Alan Boswell Insurance Brokers
Harbour House
126 Thorpe Road
Norwich
Norfolk
NR1 1UL
01603 218000

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Landlords can find their premises unoccupied for extended periods for a number of reasons; for example, simply because one tenant leaves and it takes time to find an acceptable replacement.