Agents may be banned from advertising properties with poor EPCs

1 October 2020 | Renting

A new proposal from the government says agents and portals will be banned from advertising rental properties with non-compliant Energy Performance Certificates.

The idea comes from the Department of Business, Energy and Industrial Strategy in a consultation document released as part of a government initiatives to de-carbonise buildings in order to mitigate the effects of climate change.

It wants EPCs on private rental properties to be Band C or above by 2025 for new tenancies, and by 2028 for all tenancies. 

When the BEIS is looking at enforcement, it sees agents as a possible route, and the consultation document says:

“Around 43% of landlords use a letting agent to either let or let and manage a property for them. In addition, online property platforms (which are generally not considered to be letting agents) play an increasingly important role in the lettings process.

“Legislation placing requirements on letting agents is already in place. This includes provisions contained in the Energy Performance of Buildings (England and Wales) Regulations 2012 (hereafter ‘EPB Regulations’) and in the Consumer Protection from Unfair Trading Regulations 2008. Specifically:

“- EPB Regulations: a letting agent must secure an EPC commissioned for the building and, where a property is rented, a letting agent must ensure that the EPC rating is stated on any rental advertisement in commercial media. An agent in breach of the EPB Regulations may be subject to a penalty charge of £200.

“- Consumer Protection from Unfair Trading Regulations 2008: letting agents who state inaccurate EPC ratings may be in breach of these Regulations.

” The Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to Scheme etc) (England) Order 2014: dictates that all letting agents join one of two government approved redress schemes. If the letting agent fails to provide an EPC or offers a property without one, they may be in breach of the respective codes of practice and thus in breach of the Consumer Protection from Unfair Trading Regulations 2008.”

In addition, the proposal goes on to say that while portals are not agencies, they can be a means of enforcing higher energy efficiency. The document says:

“Under the Consumer Rights Act 2015, online platforms do not meet the definition of a letting agent because they carry out the functions of advertising, disseminating information and bringing people together, none of which qualify as letting agency work. If a property is advertised on an online platform without an EPC, or with an inaccurate EPC, responsibility for compliance with the EPB Regulations falls either to the ‘relevant person’ or ‘person acting on behalf of the relevant person’ (regulation 11(2)) of the EPB Regulations).

“The wording of the EPB Regulations suggests that any person whom the landlord formally appoints (probably with payment for doing so) to act on their behalf in the matter of advertising would be under the same legal duty as the landlord to ensure that the energy performance rating of the building, as expressed in the energy performance certificate, is stated in any advertisement of the sale or rental in commercial media. It would seem that this duty would apply to advertising on any commercial media, not just online platforms.

“Whilst the above legislative levers may cover letting agents to some extent, government considers that a specific requirement on letting agents and online property platforms not to advertise or let properties that do not comply with the PRS Regulations would significantly strengthen and simplify the existing penalty regime, and encourage greater compliance overall. It would also help address confusion around which set of regulations applies depending on what type of online property platform is considered, or whether a letting agent may be in breach.”

The bulk of the BEIS consultation document outlines the ever-stricter energy targets required of the PRS in the next decade in order to:

– decrease bills for low income and vulnerable tenants, in support of the government’s statutory fuel poverty target;

– increase the quality, value and desirability of landlords’ assets;

– reduce energy bills for tenants and ensure warmer homes;

– support investment in the domestic retrofit supply chain across England and Wales;

– provide greater energy security through lower energy demand on the grid and reduced fuel imports.

Although there are some options in the 48-page document, the government makes clear that its “preferred policy scenario for improving the energy performance of privately rented homes” consists of four elements:

– raising the energy performance standard to Energy Performance Certificate energy efficiency rating Band C;

– achieving the improvements for new tenancies from 2025 and all tenancies from 2028;

– increasing the maximum investment amount, resulting in an average per-property spend of £4,700 under a £10,000 cap;

– introducing what government calls a ‘fabric first’ approach to energy performance improvements (this is improving the performance of the materials that make up the building fabric itself, before considering the use of mechanical systems).

You can see the consultation document here, with details of how to respond

The closing deadline is 11.45pm on December 30, while the government says it will respond to comments next spring.

This post has originally been featured in Letting Agent Today.