Minimum EPC rating for landlords: what applies today

The standard, and the two dates behind it

gov.uk states that since 1 April 2020, landlords can no longer let or continue to let properties covered by the MEES Regulations if they have an EPC rating below E, unless they have a valid exemption in place. The earlier stage was 1 April 2018, from which private landlords could not let covered properties on new tenancies to new or existing tenants where the rating was F or G. From 1 April 2020 the prohibition extended to all relevant properties, even with no change in tenancy (gov.uk). The underlying law is the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.

Which properties are covered

gov.uk sets a two-part test. The property must be let on an assured tenancy, a regulated tenancy or a domestic agricultural tenancy, and it must be legally required to have an EPC. Its rule of thumb for the second limb: if the property has been marketed for sale or let, or modified, in the past 10 years, it will probably be legally required to have one. If either limb fails, the property is not covered and you may let it with an F or G rating. If both are met and the rating is F or G, you must act.

The cost cap

• £3,500 including VAT is the current cap on what you must spend. gov.uk's wording is that you are not currently required to spend more than this.
• Spend less if less will do. If the property can reach E for under the cap, that is all you need to spend.
• If £3,500 will not reach E, install everything you can within that amount, then register an 'all relevant improvements made' exemption.
• Third-party funding removes the cap. Where funding covers the full cost of reaching E, the cap does not apply and you should use all of it.
• Spend since 1 October 2017 counts towards the cap.

Enforcement and penalties

Local authorities enforce, and can serve a compliance notice. gov.uk states that where a local authority confirms a property is or has been let in breach, it may serve a financial penalty up to 18 months after the breach and may publish details of the breach for at least 12 months. The maximum amounts apply per property and per breach: up to £2,000 and/or publication for renting out a non-compliant property for less than 3 months; up to £4,000 and/or publication for 3 months or more; up to £1,000 and/or publication for providing false or misleading information on the PRS Exemptions Register; up to £2,000 and/or publication for failure to comply with a compliance notice. gov.uk states the maximum you can be fined per property is £5,000 in total. There is a right to ask the local authority to review, and a right of appeal to the First-tier Tribunal.

One nuance landlords miss: if the property is currently empty and you are not planning to let it, gov.uk states you do not need to take action to improve its rating until you decide to let it again. The duty attaches to letting, not to ownership.