Posted on May 25, 2018 in Property by Sandy Grant
These are challenging times for private landlords who find themselves dealing with an ever-increasing raft of new regulation, and are now getting to grips with the terms of Private Housing (Tenancies) (Scotland) Act 2016 and the new rules and regulation relating to Private Residential Tenancies that came into force on 1 December 2017.
There are, however, other changes in the offing that will require the attention of Landlords, and soon.
Landlords, and those considering entering the buy-to-let market need to be aware of the proposals presently under consideration by the Scottish Government regarding the introduction of minimum standards of energy efficiency in private rented sector housing. Proposals on this point have already been adopted in England and come into force on 1 April 2018. It is highly likely that similar new rules will be adopted in Scotland on 1 April 2019.
The principle behind the proposals is to improve the quality and energy efficiency of private residential accommodation in Scotland. The proposals fit with the Scottish Government’s commitment to climate change targets, energy efficiency targets and fuel poverty targets. This is all part of Scotland’s long term energy efficiency programme (SEEP).
Briefly, the proposals are as follows:-
- Private rented homes in Scotland will require an energy rating no lower than level “E”. The rules will apply in the case of all properties where new leases are entered into on or after 1 April 2019. If a landlord is letting a property on or after that date, they will need to be able to demonstrate that the property has a minimum energy rating of E or above.
- Where a property currently carries an EPC that shows a band F or G, then a landlord looking to begin a new lease on or after 1st April 2019 will, be required to instruct a “minimum standards assessment” and the result lodged on the EPC register before renting out the property. It is likely that most Chartered Surveyors will offer this service. The minimum standards assessment will provide recommendations as to what work is required to bring a property up to the appropriate standard. The owner will then have 6 months from the date of the registration of that assessment to carry out the work to bring the property up to the appropriate standard.
- Final details are not yet available but it is anticipated that in certain circumstances, an owner may not be required to carry out all of the works detailed in the assessment, or may be given a longer period of time than 6 months to carry out the works. It is proposed that there will be a cost “cap” on the value of the works to be carried out, of £5,000.00.
- It is proposed that failure to comply with the standards can result in a landlord being liable to a civil fine (issued by the local authority) of up to £1500.00
- The current propsals suggest that all private residential properties will need to conform to energy efficiency level “D” over a period of time. There is presently no timescale for this standard to be reached though it might be anticipated that the period allowed would be not more than 5 years from the introduction of the new standards.
- All properties which are subject to the minimum energy standards will need to meet those standards, by 31 March 2022. This means that landlords who have long term tenants in properties, and where there is no change of tenancy between 31st March 2019 and 31 March 2022, will still need to upgrade properties which fall below the relevant energy efficiency standard, not later than 31 March 2022, and provide an EPC demonstrating that the property meets the standards applicable at that date.
- Landlords, present and future, who are affected by the proposals, are likely to incur costs in bringing some properties up to the appropriate standard. These costs could be considerable.
- For existing landlords, thought should be given to having the relevant minimum standard assessments carried out over their affected properties as soon after the proposals transform into regulations, so that plans can be put in place for upgrading works to be carried within the necessary time scales.
- For new entrants to the buy-to-let market, and existing landlords purchasing additional properties to rent, it is important that the current energy efficiency level of a property is checked (by reference to EPC) before committing to a purchase as this will confirm whether or not a property will be affected by these proposals and as a consequence attract the resultant costs of upgrading.
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